Amran: Alleged Manipulation of Palm Oil Export Values Costs the State Rp600 Trillion Annually

Agriculture Minister Andi Amran Sulaiman has revealed that the alleged practice of under-invoicing in crude palm oil (CPO) exports is causing Indonesia to lose potential revenue of up to Rp600 trillion annually. He stated this is why President Prabowo Subianto has ordered a single-door governance system for palm oil exports to close this gap. Amran assessed that the alleged practice is evident from the misalignment between global CPO price movements and domestic fresh fruit bunch (TBS) prices. When global CPO prices and the dollar exchange rate strengthen, TBS prices actually decline. “Yesterday the President ordered, there is a game being played. The President ordered a single door. Why? There is under-invoicing,” the Minister said in Jakarta on Tuesday. He explained that the government has observed a significant price difference between domestic CPO transaction values and selling prices in destination countries. This condition, according to him, reduces the state’s potential revenue from the taxation sector. Amran has summoned relevant parties to cease practices that harm national interests. He reminded business actors not to play games with the country for business profit. “The global CPO price is Rp27,000 per kg. The dollar rose to Rp18,000 or Rp17,000, that’s a 10 percent strengthening. TBS should rise, but CPO TBS fell. This doesn’t make sense. And I called them, don’t you play games with your country,” he said. He explained that the alleged under-invoicing occurs when CPO is purchased at a low price domestically, then sold at a much higher price abroad to a company within the same business group. This scheme, he said, causes the potential tax revenue that should be received by the state to be lost. Amran estimated that if the practice has been ongoing for decades, the losses borne by the state are enormous. He cited a loss figure over 34 years reaching around Rp15,000 trillion, equivalent to the asset value of state-owned enterprises. “Under-invoicing means buying at Rp14,000, selling abroad at Rp27,000, even though it’s the same company. So how much tax is lost, over 34 years? That’s Rp15,000 trillion lost to the state,” he said. He said the government sees an opportunity to increase state revenue if CPO exports are conducted directly to destination countries without such loopholes. According to him, the potential value of palm oil exports could double. Amran added that the government estimates Indonesia loses opportunities of around Rp500 trillion to Rp600 trillion annually from the palm oil sector due to these alleged practices. This value could reach Rp6,000 trillion in a decade if not immediately rectified. The government is now strengthening palm oil export governance as part of efforts to optimise state revenue and increase the added value of strategic commodities. This step is also part of the downstreaming agenda consistently pushed by President Prabowo Subianto.