JAKARTA, Kompas: Regional governments shall not recklessly extend expired Mining License (IUP). Negligence in the taxation of mining license holders should be a lesson to renew it.

Based on government records, 5,037 mining licenses had expired in the last two years. “There must be a thorough study and assessment of the license. If it does not meet the clean elements without problems or clean and clear, both in terms of licenses, finance, and the environment, the government should suspend the license (not renewed)”, said researcher of mineral and coal governance at Publish What You Pay Indonesia, Agung Budiono, Monday (17 / 4), in Jakarta.

Regarding the status of mining licenses (IUP) that have not met the criteria for clean and clear (CNC), continued Agung, the Ministry of Energy and Mineral Resources (ESDM) should work together with the provincial government to immediately catch up on this matter. Follow-up can be in the form of revocation and termination of permits. However, if the license is revoked or terminated, it is not considered eliminating the license holder’s obligations.

“We suspected that there are arrears in royalty payment obligations from thousands of license holders that the government must resolve,” said Agung. Meanwhile, the Head of the Bureau of Communication, Public Information Services and Cooperation at the Ministry of Energy and Mineral Resources, Sujatmiko, noted that thousands of mining licenses expired from 2014 to December 2016. Most of the licenses that pass are the exploration that does not have mining potential, which is quite economical. “There are also mining licenses that cannot be developed further because they overlap with conservation areas or protected forests,” said Sujatmiko.

Limited Permit for Mining License

Regarding mining licenses that do not have the status of CNC, according to Sujatmiko, legally, they can no longer carry out mining activities because they will not be given other necessary permits, such as environmental permits, until the export approval letter. The central government hopes that the governor will revoke the license that has not yet had the CNC status. The Ministry of Energy and Mineral Resources, Director General of Mineral and Coal Bambang Gatot Ariyono said, of 8,360 licenses throughout Indonesia, 5,037 licenses have expired.

So far, his party is not sure whether the corporation expired permit was extended or not. The application for a license rests with the governor in the province where the mine is located. “Of the mining licenses that are still active, 2,967 have CNC status, and 606 do not have CNC status. We have sent a letter to the governor to clarify the status that has not yet been CNC, “said Bambang.

The Ministry of Finance noted that mining companies’ compliance with tax reporting is low. In 2011, 3,037 taxpayers in the mining sector reported tax returns (SPT), and 2,964 taxpayers did not. In 2015, the situation got worse, with 2,577 taxpayers reporting Tax Return and 3,642 taxpayers did not.

Publish What You Pay Indonesia has released the research results on the potential for loss of state revenue from several mining companies’ tax avoidance practices. In the 2003-2014 period, the state has the potential to lose about Rp. 235 trillion in revenue due to mining companies not having tax identification numbers.