Purbaya: Coal Taxable Status Cuts Revenue, Prompting Export Duty

Finance Minister Purbaya Yudhi Sadewa highlighted that classifying coal as taxable goods (BKP) under the Job Creation Law reduced state tax revenue. The loss is estimated at about IDR 25 trillion, driven by large value‑added tax (VAT) refunds claimed by coal exporters. He made the remarks during a meeting with the House’s Commission XI on 8 December 2025.

Prior to the law, coal was exempt from VAT under Article 4A of the VAT Act, meaning input VAT could not be credited. The amendment re‑treated coal output as BKP, allowing a 0 % VAT rate on exports but permitting input VAT credits, which can generate refunds when credits exceed output tax. Taxpayers may claim refunds either at year‑end or through accelerated schemes defined in the Tax Procedures Law and the VAT Act.

Because of the high refunds, the government plans to impose an export duty on coal starting the 2026 fiscal year to offset the budget deficit. The measure is expected to increase costs for coal exporters and reduce the indirect subsidies previously enjoyed by the sector.