President Prabowo Signs New Coal Mining Taxation Regulation, Effective April 26, 2025

President of Indonesia, Prabowo Subianto, has officially signed Government Regulation (PP) Number 18 of 2025, amending the previous PP Number 15 of 2022. This new rule governs taxation and/or Non-Tax State Revenue (PNBP) within the coal mining industry.

The regulation was enacted in Jakarta on April 11, 2025, and is set to take effect on April 26, 2025, or 15 days after its official issuance.

The government stated that this legal update aims to provide legal certainty and business clarity for holders of Special Mining Business Permits (IUPK) that are extensions of previous contracts or agreements.

A key highlight of this regulation is the updated method for calculating taxable income in the mining sector. Business revenues must now be calculated based on the higher value between the government’s coal benchmark price (HPB) and the actual sale price received during transactions.

Additionally, royalty rates and PNBP contributions will follow a progressive scheme based on HPB brackets—starting at 15% for coal priced under USD 70 per ton, and reaching up to 28% for prices above USD 180 per ton, after deducting production dues and state asset utilization fees.

The regulation also mandates a 4% profit share to be paid to the central government and a 6% share to local governments, alongside obligations for corporate income tax and property tax compliance.

With this policy, the government seeks to enhance fiscal fairness and increase the mining sector's contribution to state revenues.