Indonesia may be losing huge in tax revenue due to a multi-billion dollar discrepancy between its coal export data to India and India's own import records, an independent local think tank said on October 22, pointing to potential systemic revenue leaks.

The Center of Reform on Economics (CORE) Indonesia found a persistent and widening gap in trade data, with the value of coal imports recorded by India consistently exceeding the export value reported by Indonesia.

The discrepancy reached a peak of $3.8 billion in 2022 and stood at $2.7 billion for 2024, according to CORE economist Mohammad Faisal. It still reaches $2.5 billion and $1.7 billion, respectively, if the freight rates are considered, Sxcoal calculated with average freight rates to East India ports.

"If India's data is accurate, it means about 26% of our coal export values to India are not recorded in Indonesian data. This certainly raises big questions about the accuracy of records and potential revenue leaks," Faisal said.

Using the 2022 gap of $3.8 billion and applying a 1.5% export income tax rate, Faisal estimated the potential annual state revenue loss at $57 million, or $37.5 million or so if the shipping costs are factored in.

Faisal noted that while the discrepancy with China was smaller, and the gap with India has been a consistent feature since 2015.

"This is not a temporary phenomenon," he said, highlighting an urgent need for improved governance and data transparency in the mineral and coal mining sector.

The findings suggest potential issues such as under-invoicing or illegal export activities, which mirroring data, a method of comparing a country's export data with its partner's import data, is often used to identify.

The research group urged the government to strengthen its digital export-import recording systems and integrate data across agencies to allow for real-time cross-checking with trading partners, a move it said was critical to close loopholes and secure state revenue.

Indonesia is the world's largest thermal coal exporter, and the sector is a vital source of state revenue.