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View all search resultsLayered taxes undercut RI’s downstream ambitions, ministry says
However, Finance Minister Purbaya Yudhi Sadewa has raised objections to the tax amnesty policy, arguing that it would not encourage businesses to become compliant taxpayers, as they would simply expect repeated leniency.
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Unlicensed miners work in a tin mining area in Toboali, on the southern shores of the island of Bangka, Bangka Belitung, in this undated photograph. Miners who continue working on land have to deploy expensive heavy machinery to dig deeper for tin ore as reserves dwindle. (Reuters/Willy Kurniawan)
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ndonesia's downstream mineral products are being priced out of the global market due to layers of taxes that artificially inflate production costs, Deputy Investment Minister Todotua Pasaribu said.
The Investment Ministry has found that a stack of tax obligations on business owners has created a paradoxical situation, countries importing Indonesian raw materials can sell processed goods back to Indonesia at a cheaper price.
Todotua cited an example, noting that the price of tin solder manufactured in Indonesia is higher than the selling price of the same product in Malaysia.
“Imagine, the ore is here, the ingot smelters are here, but when we want to push it downstream, to the solder factories in Indonesia, the solder produced is more expensive than in Malaysia,” he said at the Indonesia Green Mineral Investment Forum 2025 on Thursday.
He lamented the situation, pointing out that Malaysia processes tin ore sourced from Indonesia, yet its final product undercuts the Indonesian market. This cost disparity, he said, makes Malaysia more attractive to international buyers and stifles the growth of Indonesia's downstream sector.
Todotua emphasized that a strategic overhaul of Indonesia's fiscal policy is urgently needed to correct this imbalance.
“If we want to encourage downstream sector development [...] we must [ensure] the products are competitive [in the global market],” he said.
