Apikci asks for 11.5% export tax on cocoa

Apikci asks for 11.5% export tax on cocoa

Adianto P. Simamora, The Jakarta Post, Jakarta

The Indonesian Cocoa and Chocolate Industry Association
(Apikci) urged the government to impose a minimum 11.5 percent
export tax on cocoa beans to help ensure sufficient supplies of
the commodity at home.

"That's the only way for the government to ensure a sufficient
supply of cocoa beans at home and to help boost the quality of
local cocoa beans," Apicki secretary-general Djiddan Safwan told
reporters on Tuesday.

He said that the association had sent the proposal to the
Ministry of Industry and Trade.

The association groups local cocoa grinders and chocolate food
producers.

Cocoa beans are processed by grinders into butter and powder
which are then used by the food industry to make chocolate
products.

The association earlier said that of the existing 13 cocoa
bean grinders, only four were still in operation while the others
had been forced to suspend operations due to the limited supply
of cocoa beans.

Indonesia, the world's second largest cocoa producer after the
Ivory Cost, currently imposes no export tax on cocoa beans.

The government currently imposes a 10 percent value-added tax
and 2.5 percent income tax on the sale of cocoa beans from
traders to the local grinders.

This has resulted in a shortage of cocoa bean at home as both
traders and farmers prefer to export rather than sell to local
grinders, according to Djiddan.

"Worse still, many foreign buyers buy cocoa beans directly
from local farmers," Djiddan.

The Ministry of Trade and Industry has proposed that the
Ministry of Finance impose an export tax of between 5 percent and
20 percent on cocoa beans.

However, the Indonesian Cocoa Association (Askindo), which
groups cocoa beans traders, blasted the ministry's proposal,
saying the policy would only serve the interests of cocoa bean
grinders at the expense of farmers.

The country's cocoa grinders have a combined processing
capacity of 200,000 tons per year, however only half of the
capacity is being utilized.

Minister of Industry and Trade Rini M. Soewandi said it was
important for the country to develop its cocoa grinding industry
to add value to the commodity.

Djiddan said aside from securing supplies for local grinders,
the imposition of tax exports on cocoa beans would provide the
government with additional income which could be used to improve
the quality of farmers' output.

He said foreign buyers cut prices for Indonesian cocoa beans
due to their poor quality, caused mainly by disease.

Farmers have long complained about the lack of assistance from
the government to combat diseases plaguing their crops.

"Importers cut the prices for Indonesia beans by about US$200
per ton due to the poor quality," he said.

"The government can use the funds it collects from the export
tax to improve the quality of local cocoa beans," he said.

Indonesia exports up to 80 percent of its cocoa beans to the
United States, Singapore, Malaysia and Brazil.