Multi-Million-Dollar State Losses as 31 Extractive Industry Companies Fail to File Revenue


NOVEMBER 23, 2015

Jakarta. Thirty-one of 282 companies in the extractive industries failed to file their royalties and sales revenue, thereby causing millions of dollars in state losses, government figures show.

The finding was announced following the release of reconciled data showing the 2012-2013 non-taxation revenue collected from extractive industries, as part of the Extractive Industries Transparency Initiative, or EITI.

In an effort to increase transparency, Indonesia implemented EITI in 2010, which sets the global standard for transparency for revenue derived from the oil, gas and mining industries.

“The report was published to give a comprehensive explanation on extractive industry activities in Indonesia to calibrate the perceptions of transparency standard among stakeholders,” said Montty Girianna, the deputy for energy, natural resources and environmental management in the office of the coordinating minister for the economy.

The nation’s third EITI report, which was compiled by certified public accountants Sukrisno, Sarwoko and Sandjaja, covers all state revenue earned by the government from companies involved in the extractive industries, such as oil, gas, minerals and coal.

The report includes a total of 174 oil and gas companies and 108 companies in the mining sector. However, 10 partners of the oil and gas companies and 21 mining companies failed to file their tax payments, royalty and sales revenue shares.

According to the report, the 10 partners account for $97.57 million, or 1.09 percent of the $8.95 billion total tax revenue in 2012, and $29.57 million (0.37 percent) of the $8.06 billion total tax revenue in 2013.

The 21 mining companies account for Rp 528.53 billion ($39 million) or 2.52 percent of Rp 21.01 trillion in government revenue in 2012 and Rp 759.68 billion or 3.02 percent of Rp 25.15 trillion state revenue in 2013.

The report said Indonesia booked Rp 322.14 trillion in revenue from the oil and gas sector in 2012, or 24.1 percent of Rp 1,338 trillion of the total state revenue at the time. Revenue from mining in 2012 was Rp 87.58 trillion, or 6.5 percent of the total state revenue.

In 2013, the revenue from the oil and gas sector amounted to Rp 326.78 trillion, or 22.7 percent of the total state revenue. At the time, revenue from mining reached Rp125.57 trillion or 8.7 percent of the total state revenue, which was Rp 1,439 trillion.