Jakarta, CNBC Indonesia – Mining entrepreneurs, both mineral and coal (minerba), still do not agree with the rules of obligation exporter’s obligation to deposit Export Proceeds Foreign Exchange (DHE) in the domestic financial system. Because it has been running for three months, mining entrepreneurs asked the government to immediately evaluate it.
In accordance with applicable regulations, DHE’s obligations can be evaluated for three months after the regulation is issued. The DHE regulations are contained in Government Regulation (PP) Number 36 of 2023 which revises the previous regulation, namely PP No. 1 of 2019, concerning DHE from exploitation, management and/or processing of natural resources (SDA).
Executive Director of the Indonesian Coal Mining Association (APBI) Hendra Sinadia said that after three months of this regulation, exporters had difficulty managing cash flow (cash flow) amidst the downward trend in commodity prices.
Meanwhile, said Hendra, the burden of operational costs was added to by the increasingly high burden of royalty rates. “In the regulation there is an evaluation mechanism after 3 months of the regulation being in effect. So we ask that it be evaluated immediately this October, and it’s not just APBI who asked for it, KADIN and APINDO too, please check it,” explained Hendra to CNBC Indonesia, Monday (30/ 10/2023).
Hendra stated that all exporters, including coal, minerals, plantations, fisheries and forestry, felt the impact of difficulties in managing cash flow. “So everyone is affected the same, sir, not just mining. If this rule applies, all exporters (mining, plantations, fisheries) have submitted complaints, before this rule takes effect on September 1 and after this rule comes into effect,” said Hendra.
As per the applicable provisions, the Regulation mandates that DHE SDA deposited by exporters be a minimum of US$ 250 thousand in the domestic financial system for a minimum period of three months from placement in a special SDA account.
Previously, Acting Executive Director of the Indonesian Mining Association (IMA), Djoko Widajatno, said that his party objected to the regulation which will become effective on August 1 2023.
He considered that the new PP was not in accordance with what was regulated in Law Number 24 of 1999 concerning free foreign exchange traffic. PP 36/2023 is considered to disrupt the liquidity of the business world which has been previously regulated in law.
“BI adheres to the Free Foreign Exchange Traffic Law, so holding DHE that is not in accordance with the above regulations will disrupt liquidity in the business world,” explained Djoko to CNBC Indonesia.
Meanwhile, Djoko said that entrepreneurs, especially mining entrepreneurs in the mineral and coal (minerba) sector, are worried that if the DHE is later stored in the domestic banking system, it will not be able to meet the need for foreign currency.
This is because domestic DHE storage can enable the government to use these reserves to pay government debt.
“Foreign exchange entering the Indonesian banking system creates a large amount of dollar reserves. Entering the money market should not be used to pay government debt, so concerns about insufficient foreign currency cannot be overcome, because the TKDN (Domestic Component Level) in mining is still low,” he added.
[Gambas:Video CNBC]
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(pgr/pgr)