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NEWS ADMIN

Mahamad Rodzi Abdul Ghani

DATE

30/09/2004

NEWS PROVIDER

Mahamad Rodzi Abdul Ghani

NEWS SOURCE

The Jakarta Post

CATEGORY

HEADLINE

Plan to up export tax on palm criticized
30/09/04 The Jakarta Post, Jakarta - The Ministry of Finance's plan toincrease tax revenue from the export of plantation commodities woulddiscourage the industry from exporting the commodities, which in turnwould eventually reduce state revenue, an official with the Ministry ofIndustry and Trade said on Tuesday.

Ministry of Industry and Trade official Sabar H. Pasaribu said that hisoffice had opposed the plan as it would hamper the export of keycommodities such as crude palm oil (CPO).

According to Sabar, the Ministry of Finance planned to increase the taxrevenue by using the market price as the export base price (HPE) insteadof the current fixed price of US$160 per ton for CPO.

Exporters would then pay 3 percent of the HPE as tax.

Using the average CPO market price of $400 per ton, exporters would haveto pay $12 per ton of exported CPO, or 250 percent higher than the currentrate of $4.8 per ton.

Sabar said that the export tax mechanism was originally aimed atregulating exports, not as a source of tax income for the government.

The country's CPO export volume is projected to increase by 7.69 percentthis year to 7 million tons from 6.5 million tons last year.

Production is projected to slightly increase to 10.4 million tons from 9.9million tons last year.

Indonesia exports CPO to China, India, Pakistan, Bangladesh, theNetherlands and new markets such as eastern Europe.