The rapid development of Indonesia’s nickel industry amid rising global demand for electric vehicles has encouraged the government to strengthen downstream industrialization policies and optimize state revenue. This article discusses taxation aspects within the nickel mining and refining industry, including Article 22 Income Tax, regional taxes, regional levies, and Mineral Reference Price (HMA) based Non-Tax State Revenue (PNBP). These policies reflect the government’s efforts to balance investment interests with the optimization of fiscal revenue. Amid increasing foreign investment and the expansion of nickel industrial zones, legal certainty and tax compliance have become essential factors in maintaining industrial stability. Beyond functioning as state revenue instruments, taxation policies also play a role in distributing the economic benefits derived from natural resources. Therefore, the effectiveness of tax governance will significantly determine the sustainability and competitiveness of Indonesia’s nickel industry in the future.
Amid the global boom in electric vehicles and the worldwide energy transition, Indonesia is playing a strategic card whose value extends far beyond that of a mere mining commodity: nickel. The country not only possesses the world’s largest nickel reserves but is also positioning itself as a new center of gravity for the global battery and metals industry.
Sulawesi, Maluku, and Papua are no longer viewed solely as mineral-producing regions. These areas are gradually transforming into arenas for international investment competition. Smelters are growing rapidly, industrial zones are expanding aggressively, and foreign capital inflows are arriving at an unprecedented scale.
The Indonesian government appears to understand that the future of industry will not be won by countries that merely export raw materials. Therefore, nickel downstream processing has become a key strategy to increase added value, expand employment opportunities, and boost state revenue.
However, behind the massive investments and smelter development, there is one aspect that often escapes public attention: taxation. In fact, the tax structure and state revenues generated from the nickel industry will determine how much of the nation’s natural wealth truly returns to society.
The Greek philosopher Aristotle once said, “The whole is greater than the sum of its parts.” This quote is highly relevant to Indonesia’s nickel industry today. Mining, smelters, taxation, investment, and regional development cannot be viewed in isolation. Together, they form an interconnected national economic ecosystem.
The government has established various state revenue instruments from the nickel mining and refining sector, ranging from Article 22 Income Tax, regional taxes, regional levies, to Non-Tax State Revenue (PNBP). These policies are not merely tax collection tools, but mechanisms for distributing the economic benefits derived from the exploitation of natural resources.
Article 22 Income Tax (PPh Article 22)
In practice, Article 22 Income Tax is imposed on nickel commodity exports as well as the purchase of nickel from mining business permit holders. Article 22 Income Tax is an income tax collected by government treasurers or certain appointed entities on import activities, exports of coal mining commodities, exports of metallic and non-metallic minerals, as well as several other business activities such as plantation product purchases, motor vehicle sales, oil and gas sales, and the sale of luxury goods.
Based on Article 218 of Minister of Finance Regulation (PMK) No. 81 of 2024, the imposition of Article 22 Income Tax in the nickel mining and refining industry is regulated as follows:
- Nickel commodity exports by exporters are subject to a 1.5% tax on the export value as stated in the export customs notification, except for taxpayers bound by mining cooperation agreements and contracts of work.
- Nickel purchases from entities or individuals holding mining business permits by industries or business entities are subject to a 1.5% tax on the purchase price excluding Value Added Tax (VAT).
Article 22 Income Tax must be deposited into the State Treasury no later than the 15th day of the following month and reported in the Monthly Unified Income Tax Return no later than the 20th day of the following month.
Regional Taxes and Regional Levies
Regional Tax is a mandatory contribution to the region owed by individuals or entities that is coercive under the law, without direct compensation, and used for regional needs for the greatest prosperity of the people. Meanwhile, Regional Levy is a regional charge imposed as payment for services or specific permits provided and/or granted by the Regional Government for the benefit of individuals or entities.
Regional taxes also apply to nearly all operational activities of the industry, ranging from operational vehicles, heavy equipment, fuel consumption, to the ownership of land and nickel refining facilities. Types of regional taxes, levies, and tax rates are regulated under Law No. 1 of 2022 concerning Financial Relations between the Central Government and Regional Governments. The following taxes and levies may apply to nickel mining and refining activities:
| Tax Type | Object | Tax Base | Rate |
| Motor Vehicle Tax | Ownership and/or control of motor vehicles. Nickel mining companies must pay Motor Vehicle Tax when purchasing trucks, pick-ups, and operational vehicles | Motor Vehicle Sales ValueWeight reflecting road damage and/or environmental pollution caused by vehicle use | 1.2%–6.0%2.0%–10% for provincial regions not divided into autonomous regencies/cities |
| Heavy Equipment Tax | Ownership and/or control of heavy equipment. Nickel mining companies must pay Heavy Equipment Tax when purchasing heavy equipment. | Heavy Equipment Sales Value | 0.2% |
| Motor Vehicle Fuel Tax (PBBKB) | Delivery of motor vehicle fuel by suppliers to consumers/users. Collected when mining companies purchase diesel fuel for operational vehicles and heavy equipment. | Fuel Sales Value before VAT | 10% |
| Rural and Urban Land and Building Tax (PBB-P2) | Land and/or buildings owned, controlled, and/or utilized by individuals or entities, including smelters, office areas, warehouses, and supporting infrastructure. | Tax Object Sales Value (NJOP) | 0.5% of NJOP |
| Duty on Acquisition of Land and Building Rights (BPHTB) | Land and/or building acquisition. BPHTB is imposed when smelter companies purchase or acquire rights over new land for factory locations. | Tax Object Acquisition Value (NPOP) | 5% of NPOP after deduction of Non-Taxable Tax Object Acquisition Value (NPOPTKP) |
Non-Tax State Revenue (PNBP)
In addition to central and regional taxes, the government also obtains revenue through Non-Tax State Revenue (PNBP). PNBP refers to charges paid by individuals or entities that receive direct or indirect benefits from services or from the utilization of resources and rights granted by the state.
PNBP from the nickel industry is derived from royalties on nickel ore and refined products. Interestingly, the royalty rates now move dynamically based on the Mineral Reference Price (HMA). This means that when global nickel prices increase, state revenue also rises. This policy demonstrates how the government is attempting to balance investment attractiveness with state revenue interests. Investors require legal and fiscal certainty, while the state requires revenue for infrastructure development, education, and public welfare.
PNBP from the nickel mining and refining sector is regulated under Government Regulation No. 19 of 2025 concerning Types and Tariffs of Non-Tax State Revenue Applicable to the Ministry of Energy and Mineral Resources, effective from 26 April 2025. The details are as follows:
