BPK Calls for Review of Coal VAT Regulations Following Restitution Surge

Concerns Over State Revenue Impact

The Audit Board (BPK) has urged Finance Minister Purbaya Yudhi Sadewa to conduct a comprehensive review of the current Value-Added Tax (VAT) regulations governing the coal mining sector. This recommendation follows a significant increase in VAT restitutions that has raised concerns about potential negative impacts on state revenue.

Regulatory Background and Current Issues

The BPK's findings, as detailed in their first semester 2025 examination report, highlight that the classification of coal mining products as Taxable Goods (BKP) was implemented without thorough analysis of its tax revenue implications. The current regulatory framework is based on Law No. 11/2020 on Job Creation, Law No. 7/2021 on Tax Harmonization, and Government Regulation No. 49/2022.

Key Concerns and Potential Consequences

1. Significant Increase in VAT Restitutions: The BPK noted a substantial surge in VAT restitutions in the coal mining sector, potentially reducing state revenue.
2. Lack of Comprehensive Impact Analysis: The decision to classify coal mining outputs as BKP was made without adequate assessment of its financial implications.
3. Regulatory Review Needed: The BPK has emphasized the need for a thorough evaluation of the existing regulations to mitigate any adverse effects on the national treasury.

Implications for the Coal Mining Sector

The coal mining industry is a significant contributor to Indonesia's economy. Any changes in tax regulations or their implementation can have far-reaching consequences for both the industry and state finances. The upcoming review is expected to balance the need for fiscal prudence with the sector's operational requirements.