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Govt points to revenue jump in defense of downstream nickel policy
Following recent criticism, the government has argued in defense of its policy to boost investment in the nickel processing industry, saying it had paid off for the country with a significant rise in tax and export revenues.
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A worker stands on Oct. 18, 2019 before mounds of nickel pig iron, or low-grade ferronickel, produced in the Morowali Industrial Park in Bahodopi district, Morowali regency, Central Sulawesi.
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ndonesia’s policy to develop its downstream nickel industry has resulted in a significant increase in state revenue, a senior official has said as the government defends its development agenda following recent criticism.
Septian Hario Seto, a senior official at the Office of the Coordinating Maritime Affairs and Investment Minister, said the country’s nickel tax and export revenue would not have increased significantly if the government had not enforced its downstream development policy.
If the government hadn’t imposed its 2020 ban, "revenue from nickel ore exports would only amount to [US$110 million], which [would have been] less than tax revenue from the downstream nickel [industry],” Seto said in a statement issued on Saturday.
Two years later in 2022, tax revenue from the downstream nickel industry surged tenfold to Rp 17.96 trillion ($1.17 billion) compared to Rp 1.66 trillion in 2016, according to Seto, while corporate income tax saw a 21-fold rise to Rp 7.36 trillion over the same period.
Meanwhile, exports of nickel matte and mixed hydrate precipitate (MHP) booked revenues of $3.8 billion and $2.1 billion, respectively.
“The total of all nickel product exports reached $34.3 billion, or Rp 510 trillion [in 2022], exactly the amount the President specified,” Seto added, referring to a statement President Joko “Jokowi” Widodo made on Aug. 10 in Jakarta.
Read also: ‘Missing link’ in Indonesia’s economic development, says INDEF
