Govt plans export tax on industrial, agricultural raw materials<\/p>\n
Dow Jones
\nJakarta<\/p>\n
The Ministry of Finance has drafted a bill aimed at taxing raw or
\nsemifinished industrial and agricultural products exported out of
\nthe country, a senior government official said on Friday.<\/p>\n
"The bill is aimed at ensuring sufficient supply of raw
\nmaterials for domestic industry, and stabilizing commodity prices
\nin the domestic market," said Muhammad Najib, director of exports
\nfor agriculture and mining products at the Ministry of Trade.<\/p>\n
The Ministry of Finance has already submitted the bill to the
\nPresident for approval.<\/p>\n
Currently, the government has in place a system of export
\ntaxes on raw and semifinished products, but the taxes do not
\napply to all goods. For example, exports of palm oil products are
\nsubject to 1 percent to 3 percent in taxes, while cocoa bean
\nexports are not taxed at all.<\/p>\n
It is not immediately clear whether the new law will apply to
\nall goods.<\/p>\n
The bill would not stipulate what commodities will be subject
\nto the export levy, Nadjib said.<\/p>\n
"A list of commodities will be proposed by related ministries
\nsuch as the Ministry of Agriculture and Ministry of Industry
\nafter the bill is passed," he said.<\/p>\n
The finance ministry will then determine the export tax based
\non the list of commodities submitted by the ministries, said
\nNadjib.<\/p>\n
The government has already agreed that cocoa beans -- a key
\nagricultural export -- will top the list of commodities to be
\ntaxed, according to M. Yamin Rachman, director of agro industry
\nat the Ministry of Industry.<\/p>\n
The tax to be levied on cocoa beans is expected to ease a
\ndomestic supply shortage, which has persisted for years.<\/p>\n
A 10 percent value-added tax imposed in 2000 on all primary
\nagricultural commodities sold to domestic processors has prompted
\ngrowers to export up to 80 percent of the country's total cocoa
\nbean output to avoid the tax.<\/p>\n
Last year, Indonesia's cocoa grinding industry only operated
\nat half of its installed capacity of 310,000 metric tons a year
\ndue to a lack of cocoa beans.<\/p>\n
Yamin said an initial 2 percent to 3 percent export tax on
\ncocoa beans will be proposed.<\/p>",
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