Job Creation Law Costs Indonesia IDR 25 Trillion, Purbaya Claims
Here’s a breakdown of the news article, focusing on the key details:
Main Point: The Job Creation Law (Law Number 10 of 2020) is negatively impacting state revenue from the coal sector due to large VAT refunds.
key Details:
* Change in Coal Status: The law changed the status of coal from non-taxable to taxable goods.
* VAT Refunds: This change resulted in the coal industry being able to request and receive significant VAT refunds from the government – around IDR 25 trillion (approximately $1.6 billion USD) per year.
* Negative Net Income: The refunds are so large that the government’s net income from the coal sector has become negative, despite taxes collected.
* Indirect Subsidies: The Minister of Finance argues this effectively provides an indirect subsidy to already profitable coal companies, which he views as unfair.
* Proposed Solution: The government is planning to reintroduce export duties on coal and gold to alleviate the fiscal pressure and improve state revenue.
* Competitiveness: the government believes this change won’t harm the industry’s global competitiveness as it reverts to the previous system.
Key People Mentioned:
* Purbaya yudhi Sadewa: Minister of Finance (source of the information).
In essence, the article highlights an unintended consequence of the Job Creation Law – a reduction in state revenue from a key industry (coal) and a perceived unfairness in subsidizing profitable businesses. The government is now seeking to correct this through export duties.