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High commodity prices may encourage fraud, ministry warns
The Finance Minister has cautioned against corporate fraud, particularly as regards the DMO, amid the surge in global commodities prices.
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A worker stands atop a pile of coal in a truck bed at Marunda Port in Jakarta on Jan. 17, 2022, after the government eased the export ban on the commodity. (AFP/Adek Berry)
F
inance Minister Sri Mulyani Indrawati has warned of fraudulent practices as businesses might seek to shirk some obligations to maximize their profits in response to surging mineral and coal prices.
Sri Mulyani, formerly a World Bank managing director, urged ministries and agencies to coordinate closely to minimize the potential for fraud, which could deprive the state of potential revenues to the tune of trillions of rupiah.
“[Amid the high] commodity prices, the threat to good governance is very big. The incentive to violate good governance, for smuggling, for under-invoicing and for tax evasion also become bigger,” the minister said on Tuesday during the online launch of a nationwide monitoring system for mineral commodities.
Read also: Oil, commodities surge amid selloff in global shares
The surge in mineral prices has brought fortune to Indonesia. In 2021, the government made Rp 124.4 trillion (US$8.7 billion) in state income from tax, export duties and nontax revenue in the minerals industry, the highest in five years.
The prices of many commodities like nickel, coal, aluminum and oil are at multiyear record highs, especially as a result of the war in Ukraine and the sanctions imposed on aggressor Russia.
Speaking at the same event, Coordinating Maritime Affairs and Investment Minister Luhut Pandjaitan said on Tuesday that he was glad that the nickel price had risen to around $44,000 per ounce, but cautioned that there were still many “rats” in the country, a reference to corrupt people depriving the country of state revenue.
