Jakarta-Justice Tax Forum (FPB) asked for transparency in mining taxation regarding the large number of illegal miners operating without following the applicable regulations.
“We ask the government to take firm action against companies that do not comply with tax payments, companies that do not have a tax identification number (NPWP) and do not report their tax returns,” said FPB Coordinator AH Maftuchan in Jakarta, Sunday (18/10).
He explained that Indonesia was in a state of emergency for the flow of illegal money. In 2003, the total illegal flow of money from Indonesia to foreign countries was estimated to have reached Rp. 141.82 trillion, increasing to Rp. 227.75 trillion in 2014. Indonesia is among the five countries with the largest amount of illegal money flows in the world after China, Russia, India, and Malaysia.
Especially for the mining sector (oil and gas, minerals, and coal/mining materials), the increase in illegal money flows was fantastic, from 2003 to 2014 it reached 102.43 percent or an average increase of 8.53 percent each year. In 2003, the total illegal flow of money in the mining sector was estimated to have reached IDR 11.80 trillion, while in 2014 it increased to IDR 23.89 trillion.
Meanwhile, according to an economic policy researcher from Publish What You Pay (PWYP) Indonesia, Wiko Saputra, the illegal flow of money in the mining sector was caused by trade mis-invoicing transactions. This occurs due to rampant illegal mines operating and unrecorded export of mining commodities.
Another thing, said Wiko, is that a large amount of illegal money flows in the mining sector is also caused by high indications of tax avoidance and tax evasion involving mining companies in Indonesia. According to him, this can be seen from the data on the realization of tax revenues in the mining sector which only amounted to Rp 96.9 trillion. Compare this with the mining sector’s gross domestic product (GDP) which reached Rp. 1,026 trillion.
“This means that the ratio of tax revenue to GDP (tax ratio) in the mining sector is only 9.4 percent,” said Wiko.