The public was shocked by the finding of Non-Tax State Revenue (PNBP) receivables from mining and coal mining business actors whose value reached Rp26.23 trillion last October, 2016. The large amount of state receivables is due to the completion of the process of settling the company receivables from the Generation I Coal Mining Works Agreement (PKP2B) in the period 2008 to 2012 amounting to 21 trillion rupiah. While the remaining majority came from mining business licenses (IUP) to holders of Contract of Work (CoW) who have not paid PNBP financial obligations (fixed fees and royalties) on the pretext of falling commodity prices.

The Ministry of Energy and Mineral Resources recently released data that business receivables experienced a decrease with a total as of February 2017 of Rp. 5.072 trillion. The receivables are contributed from various types of licensing regimes, namely receivables from thousands of IUP business operators around Rp 3.949 trillion, PKP2B around Rp 1,101 Trillion and KK around Rp 20,636 billion (Investor Daily, March 13, 2017). While the PKP2B Generation I accounts receivable of Rp21 trillion itself was declared to have been completed, but how the settlement mechanism was not opened.

It should be noted that the Rp21 trillion receivables originated from business actors holding payments from Coal Sales Funds (DHPB) / royalties due to payment of Input VAT, taxes incurred outside the contract. In other words, because the company has paid tax outside the contract, the business actor does not want to pay royalties, which is a component of Revenue Sharing (DBH) that will be distributed to local governments.

If these receivables are declared finished, then will trillions of rupiah in royalties be collected to the regions through this year’s DBH scheme? Or there are other mechanisms implemented.

The problem of accounts receivable is not merely related to Generation I PKP2B companies, there are still thousands of IUPs as well as a number of KKs who have never paid off their receivables. Cross-ministerial coordination and dispatch of invoices has been carried out by the Minerba PNBP Directorate as an effort to settle PNBP receivables. However, the unclear address and condition of the revoked IUP are the main obstacles to the settlement effort.

The deadline for settling receivables has now been signed, namely on March 31, 2017. An ultimatum has been given, in which companies that have not completed their receivables until the deadline, the Directorate General (Ditjen) Minerba will not give a CNC certificate, Registered Exporter (ET), Approval Letter Export (SPE) and shahbandar permits. Improvements to the mineral and coal revenue system are also being pursued through the development of the E-PNBP system which aims to oversee the payment of PNBP obligations.

However, this cannot guarantee the compliance of business actors in meeting financial obligations. Law enforcement efforts in accordance with Law No. 20 of 1997 concerning PNBP need to be taken to create a deterrent effect for delinquent companies. In addition, the Ministry of Energy and Mineral Resources also needs to be encouraged to open delinquent data to the public as well as carry out a blacklist scheme (blacklist) to the level of the main beneficiaries or beneficial owners in order to be closed access to invest in the mineral sector. Without firm action from the government, this problem will be repeated again and the region as PNBP beneficiaries will continue to be disadvantaged. [RAW]

In not Categorized|PWYP Indonesia|March 31st, 2017