Head of the Tax Service Office of Timika, Papua, Hadi Susilo, said in 2015, Freeport Indonesia alone contributed more than 40 percent to Timika tax revenues of Rp2.349 trillion in 2015.
The contribution did not include tax revenue from tens subs-contractors of the U.S. mining company which has large copper and gold mines in Papua.
"We have to acknowledge that the tax revenues of the Timika Tax Service Office is very much dependent on Freeport. If Freeport Indonesia could operate normally we are optimistic the tax revenue target could be achieved," Hadi said here on Friday.
There are more than 40,000 tax payers registered at the Timika Tax Service Office including small and large tax payers like PT Freeport, he said.
They are based in four regencies - Mimika, Deiyai, Paniai and Intan Jaya, he said, adding but the Timika Tax office could effectively control the tax payers in the regency of Mimika.
Effective control could not cover other areas because of difficulty in transport facility, he said.
Hadi said large tax payers in Papua are mainly branch offices as most of the big corporate tax payers are based in Jakarta.
He said report about financial difficulty being faced vt Freeport would not affect tax revenues of the Timika Tax Office.
"The effect is not very significant if the company is facing liquidity problem as a result of the global slump, but it would be bad if there is massive dismissal of its workers," he said.
Recently PT Freeport sent a letter to the Energy and Mineral Resource Minister Sudirman Said explaining its difficulty in fully meeting its commitment to providing US$530 million as a guarantee that it would build smelter for its minerals.
The company was allowed to resume exporting copper concentrate in July 2015 until January 28 this year on condition that it would build the smelter for which it has to pay the guarantee money of US$530 million.
Sudirman said the company wants to be allowed to continue exporting unprocessed minerals after January 28 this year.
The government decided to allow the company to continue exporting unprocessed minerals for another six months. (WDY)