Royalties and taxes on gold mining

A gold mine in Indonesia pays the state in layers. The royalty comes off every ounce sold, whether the mine is making money or not, and since 26 April 2025 its rate has risen with the gold price. Land rent, income tax, VAT, regional taxes and, for exported gold, an export duty sit on top.

Each layer is charged on something different, so each belongs in a different line of the project budget.

What the law makes a holder pay

Article 128 of the Mining Law (Law 4 of 2009, as amended by Law 3 of 2020) sorts a licence holder’s payments into two groups. State revenue covers central taxes, customs duties and non-tax state revenue (penerimaan negara bukan pajak, PNBP). The PNBP part includes the land rent (iuran tetap), the production royalty (iuran produksi) and compensation for the state’s data on the area. Regional revenue covers regional taxes and levies and, for small miners, a people’s mining fee.

The royalty on gold

Government Regulation 19 of 2025 sets the royalty rates. It replaced Government Regulation 26 of 2022 and took effect on 26 April 2025. For primary gold, the royalty is a percentage of the price per troy ounce, and the band is chosen by the mineral reference price (Harga Mineral Acuan, HMA) that the energy ministry sets.

Gold reference price (HMA) per troy ounce	Royalty
Below USD 1,800	7%
USD 1,800 to below USD 2,000	10%
USD 2,000 to below USD 2,200	11%
USD 2,200 to below USD 2,500	12%
USD 2,500 to below USD 2,700	14%
USD 2,700 to below USD 3,000	15%
USD 3,000 and above	16%

Silver pays a flat 5%. The 2025 regulation raised the gold royalty, so a project model built before April 2025 needs updating.

The rates may rise again. On 8 May 2026 the energy ministry held a public consultation on a revision with new gold bands, from 14% below USD 2,500 per troy ounce to 20% from USD 5,000. Within days the energy minister put the increase on hold, and by mid-May the government had postponed changes to mining royalties and export duties. Confirm the rate in force with the ministry or a tax adviser before you rely on the table.

Land rent and the IUPK share of profit

The land rent is a fixed annual fee on the whole licence area, mined or not. Under Government Regulation 19 of 2025 it’s IDR 30,000 per hectare a year for an exploration IUP or IUPK for metal minerals, and IDR 60,000 per hectare a year in production. On a 5,000-hectare production licence that’s IDR 300 million a year.

A special mining business licence (IUPK) carries one more charge. In production, the holder pays 10% of its net profit to the state: 4% to the central government and 6% to the regions, split into 1% for the province, 2.5% for the producing district and 2.5% for the other districts in the province (Article 129). An ordinary IUP doesn’t pay it. Mining licences explains which licence a project holds.

Income tax, VAT and the export duty

Corporate income tax is 22% of taxable profit, the rate in force since the 2022 tax year under Law 7 of 2021. Dividends paid to shareholders abroad carry withholding tax on top, covered with the other rules on repatriation in moving money in and out.

When a bullion business buys gold bars, it collects 0.25% of the purchase price as an advance payment of income tax (PPh 22). That rule has applied since 1 August 2025 under Finance Minister Regulation 51 of 2025, with purchases up to IDR 10 million left out.

VAT depends on the form of the gold and where it goes. Exports are zero-rated. Gold bars of at least 99.99% purity carry no VAT when they’re sold or imported, under Government Regulation 49 of 2022, while bars below that purity are taxed. In October 2026 the government said it was preparing to let the jewellery industry use that facility for gold of 99.9%, so check the threshold when you plan sales.

Exported gold also pays an export duty of 7.5% to 15%, collected since 23 December 2025, depending on its form and on a reference price. Selling gold from an Indonesian mine sets out the bands. Like the royalty, the duty is charged on the value of the gold, not on profit.

Regional taxes and other yearly costs

The province and the district collect their own taxes and levies under regional regulations, and the list differs from one region to the next. Ask the regional revenue office (Badan Pendapatan Daerah) what applies to a mine in that district.

Some obligations aren’t taxes but still cost money every year. A licence holder has to set aside money for community development programmes, at a minimum the energy minister sets (Article 179 of Government Regulation 96 of 2021, as amended by Government Regulation 39 of 2025). A producer has to keep a fund for finding new reserves (Article 112A of the Mining Law). It also has to place reclamation and post-mining guarantees, which tie up money until the land is restored, as reclamation and closure explains.

Putting it in a project budget

Sort the charges by what they’re levied on. The royalty and any export duty come off the value of the gold sold, so they bite in a loss-making year too, and the royalty band moves with the gold price. Land rent is due from the first year of exploration. Income tax and an IUPK’s profit share come only out of profit.

Run the model at the royalty band the gold price implies, then again at the rates proposed in May 2026, and see whether the project still works. Before you buy into a licence, ask for receipts showing that royalties and land rent are paid up, because arrears stay with the company. Have an Indonesian tax adviser confirm the VAT and income tax treatment of each product the mine will sell, since it changes with the form of the gold and with the buyer.