Ministry of Energy and Mineral Resources to Apply Progressive Royalty Rates for Tin Commodities

Kementerian ESDM Bakal Terapkan Tarif Royalti Progresif Komoditas Timah

The Ministry of Energy and Mineral Resources (ESDM) plans to change the royalty rate scheme for tin commodities.

The Director General of Mineral and Coal at the Ministry of Energy and Mineral Resources, Ridwan Djamaluddin, said that the current royalty rate is a flat rate.

This provision is in accordance with Government Regulation (PP) Number 81 of 2018 where the royalty rate charged is 3%.

“By considering price dynamics, the government in this case the Ministry of Energy and Mineral Resources supports the proposal to increase the tin royalty rate, where the increase will be carried out progressively or not flatly, depending on the sales price figure,” said Ridwan in a Hearing Meeting (RDP) with Commission VII DPR RI, Tuesday (21/6).

Ridwan added that currently the government is still conducting calculations and simulations for the new tin royalty rate scheme. What is clear is that the presence of this new tariff scheme is expected to increase state revenues.

On the other hand, Ridwan acknowledged that the adoption of this new scheme has the potential to reduce the profits of business entities. However, the decrease is considered not so significant.

Meanwhile, referring to the calculation of tin prices carried out by the government. On average, the price of tin since 2015 until now is in the range of US$ 22,693 per ton. This year’s tin price is considered quite high, reaching US$ 41 thousand per ton.