CPO export tax upped to 60 percent
CPO export tax upped to 60 percent
JAKARTA (JP): The government has raised export taxes on crude
palm oil (CPO) and some of its by-products to as much as 60
percent in another attempt to discourage exports, Minister of
Industry and Trade Rahardi Ramelan said yesterday.
Rahardi said the export tax increase would enable the
government to contain the escalating price of cooking oil in the
country at around Rp 4,000 (28 U.S. cents) per kilogram.
"With the new export tax, we estimate that the domestic supply
of cooking oil will be enough. CPO producers will be more
interested in processing their products in the country," he told
reporters and a group of major palm oil producers.
If producers continued to export, he said the government would
be able to collect at least US$2.16 billion from export tax
revenue of CPO, which is currently priced at US$650 per ton in
the global market, to stabilize the local price.
The government raised taxes on CPO and crude palm olein
exports to 60 percent from 40 percent and on refined bleached
deodorized (RBD) palm oil and RBD palm olein to 55 percent from
35 percent.
It raised the taxes on exports of crude palm kernel oil to 50
percent from 35 percent, and on RBD palm kernel oil to 45 percent
from 30 percent.
It also imposed new taxes of 60 percent on the fresh fruit
bunches of oil palm and 40 percent on RBD olein in branded
containers not exceeding 5 kilograms in volume.
But it lowered export taxes of crude stearin to 25 percent
from 35 percent and of RBD stearin to 20 percent from 30 percent.
Export taxes of crude coconut oil and RBD coconut oil remained
at 20 percent and 15 percent respectively.
Rahardi said the country relied on the palm oil producers'
sense of nationalism to increase their supplies to the local
market.
The price of cooking oil, an essential commodity for most
Indonesians, has been on a staggering rise continuously in the
domestic market since late last year despite a series of
government efforts at stabilization.
Producers are more interested in exporting their products and
earning profits in U.S. dollars due to the weakening of the
rupiah. Some producers reportedly smuggled their products outside
the country to dodge the huge export tax.
When questioned by a reporter whether the high tax would prove
effective in deterring exports, Rahardi retorted: "Should I then
implement the fourth scenario?"
The fourth scenario meant banning exports, he added.
The government prohibited the exports of all palm oil products
in the first four months of this year to contain the soaring
price of cooking oil in the country.
In April, the government lifted the export ban and imposed new
export taxes of up to 40 percent for CPO and its derivatives, in
compliance with the terms set by the International Monetary Fund.
The minister also denied recent press reports that the
government was paying international prices for CPO it purchased
from three local private companies to be sold domestically to
help stabilize the soaring prices of cooking oil.
The chairman of the Indonesian Palm Oil Producers Association,
Derom Bangun, expressed his concerned that oil palm plantation
farmers would be the ones to suffer the most losses from the
implementation of the new tax.
"The export tax rise would drive CPO prices down in the
country, but the price of oil palm fruit sold by these farmers to
the processing plants would automatically be lower," Derom told
reporters after yesterday's announcement.
Farmers and small plantation holders produce about 30 percent
of the oil palm fruits in the country, he said.
They number in the hundreds of thousands, and are
predominantly located in North Sumatra, Riau and Jambi provinces.
(das)