Gapki demands zero tax for Russia-bound CPO
Gapki demands zero tax for Russia-bound CPO
M. Taufiqurrahman, The Jakarta Post, Jakarta
The Indonesian Palm Oil Producers Association (Gapki) demanded on
Friday that palm oil products to be exported to Russia under a
countertrade agreement be exempted from taxes.
Gapki chairman Derom Bangun said that tax exemptions would
help producers offer a competitive price to the State Logistics
Agency (Bulog), which would deliver the products to Russia.
Under the countertrade deal, signed by President Megawati
Soekarnoputri during a recent visit to Russia, Indonesia will get
Sukhoi Su-27 and Su-30 jet fighters and Mi-35 helicopters from
Russia in return for Indonesian commodities.
To meet the US$192 million deal, Gapki is set to deliver about
300,000 metric tons of palm oil products valued at $108.5 million
to Russia until next year. Palm oil products will make up 65
percent of all commodities to be traded with Russia.
"The zero taxation must be imposed on palm oil products
shipped to Russia, otherwise our exporters would bear more costs
for their supply," he said, adding that the current taxes were 3
percent for crude palm oil and 1 percent for its derivative
products.
Derom said that should the tax be reduced or abolished,
producers here could lower the price of palm oil to be shipped to
Russia.
He also complained that Bulog, which would act as the sole
purchaser of palm oil products from local suppliers, set a number
of restrictive requirements, which would limit companies eligible
to provide products to it.
"There are requirements that may hinder small producers from
taking part in the countertrade deal, such as the obligation to
have accounts in a certain bank or to give a guarantee if their
products are denied by Russia," he said, on the sideline
of an extraordinary meeting of Gapki here.
With the coordination from Bulog, the association is expected
to preliminary ship 42,000 metric tons of palm oil products to
Russia in June. By the end of this year, Gapki will send a total
of 100,000 metric tons, while the delivery of another 200,000
metric tons will be completed in 2004.
Indonesia is the world's second-largest palm oil producer
after Malaysia. In 2002, Indonesia exported 6.34 million metric
tons of palm oil products valued at $2.1 billion.