ESDM Minister Arifin Tasrif admitted that his ministry had discussed the matter with Finance Minister Sri Mulyani despite it being fruitless.
"No, we have not reached an agreement yet," Arifin stated at the Presidential Palace Complex in Jakarta on Monday.
Tasrif explained that the scheme was intended to serve as a mutual reimbursement for coal companies.
The fund is collected from coal companies that failed to meet the domestic market obligation (DMO). The funding will then be distributed to those that managed to comply with the DMO.
In addition, the scheme aims to cover the coal selling price gap between domestic and international markets.
The issue lies is the fact that VAT is being imposed on the scheme. Tasrif deemed the additional tax as unnecessary, as it had already been levied from trading transactions.
"The scheme was meant to compensate those who comply with the DMO, so it should not be taxed. The levy should have been imposed in the beginning," the minister remarked.
Initially, the coal levy collection scheme was to be conducted by a Public Service Agency (BLU). However, the compensation fund was then considered unrelated to Non-Tax State Revenue (PNBP), so the BLU was redesignated as a Management Agency Partner (MIP).
Related news: Government issues coal mining taxes regulation to boost state revenues
Translator: Tegar Nurfitra
Editor: Rahmad Nasution
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