Government hopes larger state revenues from Freeport

Government hopes larger state revenues from Freeport

President Joko Widodo (fourth left) shakes hands with Environment and Forestry Minister Siti Nurbaya Bakar (left) witnessed by Finance Minister Sri Mulyani (second left), BUMN Minister Rini Soemarno (left third), ESDM Minister Ignasius Jonan (fourth left), CEO Freeport McMoRan Richard Adkerson (third right), President Director of PT Indonesia Asahan Alumunium (Inalum) Budi Gunadi Sadikin (second right) and Attorney General M Prasetyo after giving information regarding the settlement of PT Freeport Indonesia's divestment at Merdeka Palace, Jakarta, Friday (12/21 / 2018). (ANTARA PHOTO/Wahyu Putro A/ama).

Jakarta (ANTARA News) - Finance Minister Sri Mulyani said the government hopes to earn larger state revenues from PT Freeport Indonesia after the takeover of the majority share the subsidiary of the U.S. mining giant Freeport McMoRan by the government.

The government, represented by holding of the state mining companies PT Inalum now owns 51.2 percent of Freeport Indonesia, which has large gold and copper mines in Grasberg, Papua.

The process of share divestment has been completed after Inalum fully paid the US$3.6 billion acquisition as announced by President Joko Widodo on Friday.

Inalum gave 10 percentage points of its shares to the Papua provincial government.

The Finance Minister said state revenues in taxes and non taxes would be larger regardless of changes in the prices of copper and gold.

Under the mineral and coal regulation, state revenues in taxes and non tax would larger, Sir Mulyani said here on Friday night.

"All revenues both in corporate income tax,individual income tax, value added tax, land and building tax, water and land tax, royalty, together would larger regardless of change in prices," she said.

The government adopts the nail down tax system with fixed percentage for all tax components in calculating state revenue from PT Freeport Indonesia.

"The components could be different . For each component in income tax , we use the present income tax. The corporate tax of 25 percent at present is smaller than 35 percent under the old contract of work , but the 25 percent tax is nailed won that any change in the income tax law the corporate tax would remain 25 percent,"she explained.

She said the new system gives certainty in their tax obligation, adding the same as in royalty.

"Under the scheme , there is certainty in the state revenues," she said.

Reporting by Calvin Basuki
Editing by Fardah Assegaf