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Jakarta – Indonesia is preparing sweeping new regulations that would impose export duties and a windfall tax on coal and nickel, two of its most lucrative commodities. The move, officials say, is designed to plug fiscal gaps, curb smuggling, and reinforce the country’s industrial policy as it seeks to transform itself into a global hub for electric vehicle batteries.
The Ministry of Finance confirmed that the plan is in its final stages. “We are drafting regulations for export duties and a windfall tax on coal and nickel,” said Purbaya Yudhi Sadewa, a senior official involved in the process.
The measures, he explained, are intended to offset ballooning subsidy costs in the state budget while ensuring that extraordinary profits from commodity booms are shared with the public purse.
A Fiscal Lifeline
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Indonesia’s subsidies for energy and essential goods have surged in recent years, straining the APBN (state budget). With global coal and nickel prices climbing, the government sees an opportunity to capture additional revenue.
The windfall tax levied on profits deemed excessive due to external market conditions would provide a fiscal cushion at a time when public spending is under pressure.
Currently, coal and nickel exports face zero export duties, a loophole that has allowed widespread under-invoicing and smuggling.
By introducing duties, the government would empower Bea Cukai (Customs) to inspect shipments before departure, tightening oversight and reducing leakage.
Balancing Industry and Revenue
The policy is not only about revenue. It is also part of Jakarta’s broader industrial strategy. Policy that restricts raw material exports in favor of domestic processing. Nickel, in particular, is central to Indonesia’s ambition to dominate the global supply chain for electric vehicle batteries.
Officials insist that while new taxes will apply to exports, incentives will be offered to companies investing in downstream industries. “We want to encourage domestic processing while ensuring fair contributions to the state,” Purbaya said.
As one of the world’s largest exporters of coal and nickel, Indonesia’s policy shift could reverberate across global markets. Importers in China, India, and Europe may face higher costs, potentially reshaping supply chains. Analysts warn that sudden levies could unsettle investors, particularly those who have poured billions into nickel smelters and battery plants in Indonesia.
Yet the government appears determined. By taxing raw exports while incentivizing domestic industry, Jakarta hopes to accelerate its transformation from a commodity exporter into a manufacturing powerhouse.
Indonesia is not alone. Governments from Chile to Australia have debated or implemented windfall taxes on mining and energy companies, seeking to capture extraordinary profits during commodity booms.
The challenge, experts say, lies in execution: setting tax rates that are high enough to generate revenue but not so steep that they discourage investment.
For Indonesia, the stakes are especially high. The country must secure revenue to sustain subsidies, but also maintain credibility as a reliable supplier in global markets.
The regulations are still being finalized, and key details such as tax rates and implementation timelines remain unclear.
Exporters are lobbying for gradual rollouts, while downstream industries demand clarity on promised incentives.
What is certain is that Indonesia is entering a new phase of resource nationalism. Coal and nickel, once symbols of raw export power, are now being reimagined as levers for fiscal stability and industrial transformation.
