Export tax helps cater to industry: VP

Export tax helps cater to industry: VP

Rendi A. Witular, The Jakarta Post/Jakarta

Amid rising criticism from many businesspeople about recent plans
to impose more export duties on coal and crude palm oil (CPO),
the government is optimistic that the policy will help develop
the local processing industry.

Vice President Jusuf Kalla said that aside from contributing
to state revenues, the planned export duties would also encourage
coal and CPO producers to sell their products to local companies.

"If all the coal and CPO are exported, the processing industry
for the two products will be hurt. Eventually, there will be no
incentives for the downstream sector," Kalla told reporters after
Friday prayers.

The government recently announced plans to impose a 5 percent
export duty on coal only if the commodity's price rises to
between US$50 and $55 a ton. At present, free-on-board (FOB)
prices for coal hovers at around $40 a ton.

Indonesia, which produced some 131 million tons of coal last
year, exports some 70 percent of its coal to Japan, Taiwan, South
Korea, India and China.

Amid rising global coal prices, coal producers have forecast
the country's coal output to increase by 19 percent to 155
million tons this year and 12 percent to 175 million tons next
year.

The government is also planning to impose a 3 percent export
duty on CPO. However, the policy has not yet been exercised
because the government is still preparing to revise the minimum
export price for the product.

At present, the minimum price is set at $160 per ton with an
international price currently at $420 per ton.

Kalla said the government would only impose the export duty if
the prices of the two products on the international market were
deemed too high and contained a high degree of return for the
producers.

"The duty will be imposed if the prices are good for the
producer, but the level of the duty is still far from the
government expectation," he said.