Windfall Profit Taxation in the Mining Sector: Lessons from Indonesia’s Policy Debate

Ihsan Rafif Alfaruq (University of Leeds)
Sasmita Citra Pertiwi (Osmania University)

Indonesian Tax Justice Review
Vol. 2 No. 2 (2025): May, 2025

Commodity price volatility has renewed interest in windfall profit taxation as a tool for equitable revenue mobilization. This paper examines Indonesia’s policy debates surrounding windfall taxes in the mining sector. Using policy and legal analysis, the study evaluates the equity rationale, revenue potential, and legal feasibility of windfall taxation. The findings suggest that windfall taxes can enhance distributive justice by capturing extraordinary profits during commodity booms, provided that design and implementation are transparent. The global contribution of this study lies in offering a developing country perspective on windfall taxation in extractive industries. Indonesia’s experience contributes to international debates on resource rent sharing and fiscal justice during periods of price volatility.