Indonesia mulls coal export tariff to curb illegal trading

• Coal exports currently duty free, limiting real-time customs oversight
  
  
• Monetising coal exports could boost state income by up to $1.45 billion
  
  

Mysteel Global: Indonesia is drafting regulations to impose export tariffs on coal as part of efforts to curb widespread under-invoicing and illegal trading while also boosting state revenue at the same time, Finance Minister Purbaya Yudhi Sadewa has said.

Local media reports quote Purbaya as saying that the Ministry of Finance is working closely with the Ministry of Energy and Mineral Resources (ESDM) to formulate the export duty mechanism. The proposal has been under consideration for around four months, though key details -- including tariff levels and the timing of implementation -- have yet to be finalised.

According to the minister, introducing export tariffs would also grant authorities greater access to coal export activities, particularly vessel inspections, and help to close regulatory loopholes that have enabled illicit practices.

"So I want to crack down on under-invoicing and illegal exports. Previously, Customs could not intervene effectively, as shipments had already departed before verification could take place," Purbaya said at the Ministry of Finance on April 22, as quoted by Bloomberg Technoz.

Coal exports are currently not subject to export duties in Indonesia, an exclusion that limits the Customs authorities' ability to supervise transactions in real time. By making coal a taxable export commodity, the government would gain stronger legal grounds to monitor shipments and enforce compliance.

Purbaya previously estimated that the policy could generate up to IDR 25 trillion ($1.45 billion) in additional state revenue. Earlier proposals suggested a tiered tariff structure of 5%, 8%, and up to 11%, depending on coal prices.

The ESDM has expressed support for the initiative, particularly as the government seeks to strengthen fiscal revenues amid volatility in global energy markets. Despite broad policy alignment, discussions between the two ministries are ongoing, and no final decision has been made regarding the tariff structure or rollout timeline, Mysteel Global understands.

Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.