South Sulawesi targets share of mining profits through new regional regulation

The South Sulawesi Regional People's Representative Council  is discussing a draft regional regulation  that will form the basis for calculating and paying the regional government's share of the net profits of Special Mining Business Permit  holders.

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"We see the important substance of this Draft Regional Regulation as providing a clear legal basis regarding the obligation to pay the regional government's share of the net profits of IUPK holders," he said at a plenary session of the South Sulawesi Regional People's Representative Council.

The draft regional regulation proposed by the South Sulawesi Provincial Government regulates the calculation, reporting, and payment or deposit to the regional government of revenue obtained from the net profits of IUPK holders.

Based on mineral and coal mining provisions, IUPK holders at the production operations stage for metal mineral and coal mining are required to pay four percent of net profits to the central government and six percent to regional governments from the start of production.

The six percent portion for regional governments is divided into 1.5 percent to the provincial government, 2.5 percent to the producing district/city government, and two percent to other districts/cities in the same province.

Syukur reminded that the revenue from mining profits should not only be used to finance routine APBD expenditure.

"We believe that this revenue shouldn't simply be added to the regional budget and used up to finance routine expenditures. Revenue from the exploitation of natural resources must provide added value for generations," he said.

The NasDem faction proposed that the revenue be directed towards, among other things, infrastructure development, improving the quality of education and health, developing workforce skills, and empowering communities around mining areas.

The funds are also considered to be able to be used to strengthen the productive economy, develop MSMEs and cooperatives, improve regional connectivity, monitor the environment, and support environmental restoration and rehabilitation programs.

"In this way, revenue from our natural resources will not just be a figure in the regional budget structure, but will become capital for long-term development in South Sulawesi," he said.