Cocoa producers urge govt to drop VAT<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
The government target to increase the export value of the
\ncountry's cocoa and cocoa products by 25 percent this year can
\nonly be achieved if the existing value-added tax (VAT) on the
\ncommodity is scrapped, says an industry leader.<\/p>\n
Zulhefy Sikumbang, chairman of the Indonesian Cocoa
\nAssociation (Askindo) said on Thursday the current 10 percent VAT
\nimposed on cocoa farmers when selling their output to the local
\nprocessing industry had prompted the farmers to export the
\ncommodity in the form of unprocessed beans.<\/p>\n
He said that this in turn had caused a shortage of raw
\nmaterials for the processing industry, forcing some of them out
\nof business.<\/p>\n
The Indonesian Cocoa Industry Association (Apikci) said from
\n12 factories listed in the association, only three were still
\noperating.<\/p>\n
"The value of cocoa will be higher in the international market
\nif it is processed first," Zulhefy told The Jakarta Post.<\/p>\n
He predicted that with the tax incentive, the local cocoa
\nindustry could enjoy an export revenue of between US$900 million
\nto $1.2 billion per year.<\/p>\n
The government revealed on Wednesday it has selected 15
\npriority export products to achieve this year's non-oil and gas
\nexport growth target of 7 percent.<\/p>\n
Cocoa is among the priority products. The government set cocoa
\nand cocoa products exports to increase by 25 percent from US$629
\nmillion in 2003 to $789 million for this year.<\/p>\n
To help achieve the target, the government is planning to
\nscrap the VAT imposed on certain raw materials like cocoa.<\/p>\n
But Zulhefy feared that the plan might not be realized in the
\nfuture when a new government is formed.<\/p>\n
"New government means new policy, so it might not
\nmaterialize," he said.<\/p>\n
He also said that processing cocoa beans prior to export was
\nnecessary because Indonesia's cocoa beans were of low quality.
\nSome 90 percent of Indonesia's cocoa production is low quality
\nunfermented beans.<\/p>\n
Indonesia is the third largest cocoa exporter after the Ivory
\nCoast and Ghana with total cocoa plantation area of 776,900
\nhectares. Indonesia's cocoa accounts to around 11 percent of
\nglobal demand which stand at 3 million tons per annum.<\/p>\n
Last year, Indonesia's cocoa output reached 433,411 tons.
\nAround 80 percent of cocoa export goes to Southeast Asian
\ncountries.<\/p>\n
Previously, Askindo said cocoa production could decline by 7.7
\npercent this year due to the expected drought in the second
\nquarter of the year.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/cocoa-producers-urge-govt-to-drop-vat-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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