- Miners operating in Indonesia will have to pay a share of their after-tax profits to both the central and local governments under new tax rules under consideration for next year, Reuters reports, citing documents outlining the proposal.
- Under the new rules, special mining permit holders would need to pay a levy on their after-tax profits of 4% to the central government and 6% to the regional governments where they operate.
- Freeport McMoRan (FCX +0.3%), which operates the Grasberg copper mine in the eastern province of Papua, and other miners currently do not pay a share of profits to central or regional governments.
- The proposed plan would set an income tax rate of 25%; FCX’s current contract, signed in 1991, sets an income tax rate of 35%, which was fixed higher in exchange for certainty that the government would not change the rate for the duration of the contract, which expires in 2021.
- Now read: Freeport-McMoRan: Indonesia Deal Is Even Worse Than I Expected
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