Mining Company Shall Pay for Royalty Charge in Amount of 10% of Its Net Profit (According to the New Mining Law)

The biggest income of Indonesia’s State is come from tax. Business activity like investment has gives big income for the state. One of the biggest incomes for the state is come from the mining business. In this case, the Mining Permit holders or Special Mining Permit holders must pay state income and regional income. In the draft of the new Mining Law, this provision is explicitly stated in Article 128 (1).

State income as mentioned above is include tax revenue and non-tax state revenues Tax revenue is every tax which shall be paid to the government in accordance to the prevailing tax regulations. According to the Article 128 (3) of the draft of New Mining Law, tax revenue shall include:

a. taxes within the authority of the Government under the provisions of laws and regulations in the field of taxation; and

b. customs and excise duties.

Then, non-tax state revenue non-tax state revenues according to the Article 128 (4) of the draft of New Mining Law shall include:

a. dead rents;

b. exploration royalties;

c. production royalties; and

d. compensation for data/information.

Regional income according to the Article 128 (5) of the draft of New Mining Law shall include:

a. regional taxes;

b. regional charges; and

c. other lawful income under provisions of laws and regulations.

The total amount which shall be paid by the mining company to the Government is in amount of 10% of its net profit. Article 129 (1) stated that metal mineral and coal Production Operation Special Mining Permit holders must pay 4% (four percent) to the Government and 6% (six percent) to the regional government, of net profits since commencing production. Furthermore, the regional government allotment will be divided again to be given as follows (Article 129 (2)):

a. the provincial government shall receive a portion of 1% (one percent);

b. the producing district/city government shall receive a portion of 2.5% (two point five percent); and

c. other district/city government within the same province shall receive a portion of 2.5% (two point five percent).

10% of net profits are a quite big amount. Moreover, as stated on the hukumonline.com, this provision has become controversy among the public, particularly the mining company since Article 129 is appear suddenly at the end of the discussion of the Mining Law and the said article also not an initiative from the government.

Against this matter, Listi Witanni, a legal staff from ANTAM said that they feel like to have pay for two times. Considered to be a big burden, ANTAM as one of mining company is still trying to clarify this matter to the General Directorate of Mineral, Coal and Geothermal of Energy and Mineral Department (known as “Dirjen Minerba DESDM”).


Too Many Cost

Formerly, in all this time, royalty charge is categorized as non-tax state revenues. This provision is provided in the Government Regulation No. 45 Year 2003 concerning on the Category of Non-Tax State Revenue in Department of Energy and Mineral. The said Government Regulation also provided provisions on dead rents amount for the Mining Right (known as “Kuasa Pertambangan”), Contract of Work (known as “Kontrak Karya”) and Coal Contract of Work (known as “Perjanjian Karya Pengusahaan Pertambangan Batubara”). According to the said Government Regulation, the amount of production contribution tariff for Mining Right and Contract of Work and Royalty is calculated by tariff time graving material selling price.

The Coal Production Outcome Fund itself (known as “Dana Hasil Produksi Batubara”) is provided in the President Decree No. 75 Year 1996 concerning on the Coal Contract of Work Provision (“PKP2B”). As stated in Article 3 (1) of the President Decree No. 75 Year 1996, Private Contractor Company shall pay 13,50% of their coal production outcome to the Government by cash upon the Free on Board price or at sale point.

The said amount which comes from the Coal Production Outcome Fund is the Government’s allotment in order to coal development defrayal, coal resource investment, environment management supervising cost and work safety on mining, exploration tariff payment, exploitation tariff and also for value added tax.

Challenges In the Year 2009

Today, I had attended in the kick-off meeting. It's a general meeting for Lawyers in my office. The founders and also a Managing Partner of the firm, M.Idwan Ganie (known as "Kikie Ganie") had opened the meeting with a good speech and very bright idea for the concept to maintain the firm. Not only him, another founder, Arief T. Surowidjojo and another partner like Abdul Harris M.Rum, also give good speech and sharp comment.

Maybe I can't talk to much about my office, however, I like the speech from my big boss. He also give his comment and hope to facing year 2009. The speech itself can be found in the website, http://www.lgsonline.com/ (click "here"). The speech give us a summary review of year 2008 and "the thing" that we may have to encountered in the year 2009.

I like this speech:

January 2009


Most of us enter the new year of 2009 with mixed feelings. What will happen this year? The global economic crisis that will very likely lead to economic depression in certain economies is haunting us. Each country has its own problems, and its policy makers are working very hard now, individually or through regional or global cooperation, to minimize the effect of the turbulence.

Indonesia is not an exception, as the country’s money market, capital market and supply of direct foreign investment are exposed to the global economic climate. We are lucky to have a Minister of Finance who also functions as a Coordinating Minister of Economic Affairs, working together with the Bank Indonesia Governor, who both agreed to quickly respond to the threats of economic depression by issuing several policies that would enable the country to sustain the rotation of economic wheels. Sri Mulyani and Budiono are both acknowledged by the public as persons of the highest integrity, and despite political pressures and in-fighting, they have proven themselves to be capable leaders in a time of crisis.

The most difficult part ahead is perhaps the fact that our economic problems will be compounded by political tension, with the coming general election of the Indonesian parliament in April 2009 and the Presidential and Vice Presidential election in August 2009. Political parties have started campaigning, and of course are understandably trying very hard to secure political financing from their constituents, business people and corporations, who at the same time are having problems with their tight budget policies. Several politicians have also started to do profiling for themselves as candidates. In Indonesia’s young democracy, we should expect to hear about smear campaigns between politicians.

Let’s hope that the government and Central Bank will be able to maintain and sustain manageable macro economic factors, continue to provide micro credits to small and medium scale economies, help corporations to reorganize and restructure their debts and their organizations, provide people with transparent policies on foods and energy prices, help farmers with affordable fertilizer price, and create programs for education and health care for the poor.

Some clients have already asked questions on how to prepare themselves for the worst. We do not do magic, but learning from our extensive experience in the last economic crisis in 1997-1998, we have advised such clients with rational steps of safety measures. First, corporations need to review their positioning in their executed contracts. If the positioning is weak or may create a problem, there is always an opportunity to re-negotiate. Everything is negotiable. And at a time like this, it’s worth doing. Second, new contracts need to be carefully drafted as to not create a contingent risk for the company, its management, shareholders and stakeholders. Such carefully drafted contracts will help when it becomes a dispute. Judges will understand the parties’ original intentions better, and no loopholes could be used to manipulate the settlement of the case. Corrupt practices involving the judiciary are often created by commercial deals or transactions that contain such loopholes. Third, it may be necessary to do an internal due diligence of their corporations in legal, financial, commercial, environmental, fiscal and other issues. The process shall involve internal resources as well as independent professionals. The purpose of the due diligence process is to find out if there is any aspect of the company’s operations that would expose it to business, legal and other risks. The result of the due diligence will also be useful for the management to make a new direction in this time of crisis. Dealing with investors, business partners, bankers, labor unions, suppliers, contractors, tax office, policy makers and stakeholders is now taking place in a totally different arena, packed tightly with sensitive issues.

At this opportunity, we wish you safe and sound business dealings in 2009, and hopefully we will all be able to navigate this rough time with dignity and integrity.

Sincerely,

Arief Surowidjojo

After all this year, this is a good chance to "wake-up". People have to fall so they know how to stand (again).

HappY New Year

Social Network Website Plague (Heboh Situs-Situs "Pertemanan")

Fiuuhh...up to the present, everyone still have their interest to visit social website. Facebook, MySpace, blog and Twitterare their daily food hehehe... If U watch people around U, they will be busy with their Blackberry to visit the social website.

Why I have to use "Plague" as the term???

Cause I think, this new behavior has already become an epidemic. It's not only happen to a teen, this Plague also spread to the adults. As an example, in my office it has become a new trend and behaviour. Even my boss also infected with this Plague...!!! WOW!!!

But who cares?!

Cause I also infected by the said Plague hehehehee...


THE EFFECT OF THE PLAGUE
Since almost everyone who use internet infected by this thing, there are also another party who use this as a chance for their own interest as follows:

1. PROPAGANDA

In the war between ISRAEL vs PALESTINE, the ISRAEL Government has use Social Network Website like Facebook, MySpace, blog and Twitter. They use the said website to gather support for their action upon their military offensive to GAZA. In the said website, the ISRAEL Government is mainly stating that their military offensive is conducted to attack HAMAS, not the civilians. However, the war is resulted with more than 900 lives had died.

Another story from Italy, Facebook also being use for Propaganda by Mafia. As example, they Facebook to praise the Godfather. Even the Godfahter had been arrested by the police, fans of the said Godfather still exist and give their praise to them. Got warmed up this invation, the Anti-Mafia Movement has been born. An example is the existence of online petition which titled "Get The Mafia Out of Facebook".

the related news:
a. Looking for Support, Israel Had Invade Facebook and Twitter (Cari Dukungan, Israel 'Invasi' Facebook dan Twitter)
b. Mafia had invade Facebook for Propaganda (Mafia 'Invasi' Facebook untuk Propaganda)

2. BUSINESS

Social Network website also can be use to advertise a Company's product as had been done by Burger King. Through Whooper Sacrifice, the Heartless Facebook user who dump 10 persons of their friends in his/her account will gifted a Wooper burger.

the related news:
Facebook User is Tempted by Free Burger (Pengguna Facebook Digoda Burger Gratis)



3. KILLING SOMEONE & TRACING A KILLER

By using the informations which showed on the Social Network Website, we can trace anyone who use the said website in the world. As reported by detik.com, the Police can caught a killer by using informations from friendster since the first meeting between the victim and the subject is begin from Friendster. As an added information, there is a relationship between the victim and the subject. Oneday, the victim had written something in the Friendster that make the subject become angry and resulted in murdering the victim.

related news:
Fiendster Lead the Way to Find the Gay Slaughter (Friendster 'Beri Jalan' Pembantaian Pria Gay Bandung)

4. Affecting Student's Performance

According to the detik.com news (click here) dated on 13/04/2009, it is reported that a researcher from State University, United States of America named Aryn Karpinski from Ohio, claiming that FACEBOOK affecting the performance of the students. Even if its like that, 79% of the respondent said that FACEBOOK does not affecting their performace.

related news:

http://www.detikinet.com/read/2009/04/13/104617/1114482/398/studi-facebook-turunkan-nilai-mahasiswa

HACK OR DEFACE (cybercrime)

Social Network Website also easily defaced by anyone. As example for Friendster, we can deface the said website by copy and paste some code. U can find the sample of the code at HERE!

HOW TO FIX THIS MATTER???

U can fix this matter. First, go to the menu setting, find safe mode option and klik “ok”. After that, open your profile and find any code which has it’s contain not as a words but merely as an abstract code just like the aforementioned code. After U find the said code, just delete the file.

Oh God!
The function of the Social Network Website had become something usefull and dangerous in the contrary. Let just hope for a better future. Live in peace is more fun hehehe....