Gapki: Palm oil export oversight needs stronger law enforcement

The Indonesian Palm Oil Association (Gapki) believes the mechanism for supervising palm oil exports in Indonesia is already very strict, but it needs to be further emphasised by strengthening law enforcement against violators, such as those engaging in under-invoicing, which disrupts contributions to state revenue. “The existing system in Indonesia is already very good. What needs to be done is law enforcement. The oversight mechanism is already in place, and Gapki always encourages all members to comply with tax regulations,” said Yustinus Lambang Setyo Putro, Head of Taxation and Fiscal Affairs at Gapki, in a statement in Jakarta on Saturday. He said under-invoicing has come under the spotlight after the government issued Government Regulation Number 24 of 2026 concerning the Governance of Strategic Natural Resource Commodity Exports. Furthermore, the government established PT Danantara Sumberdaya Indonesia (DSI) as a state-owned enterprise acting as the sole intermediary for the export of three strategic commodities—palm oil, coal, and ferroalloy—to increase transparency and close loopholes for under-invoicing practices. Yustinus explained that export oversight is conducted in multiple layers, starting from the licensing process through the Indonesia National Single Window (INSW), the CEISA system of the Directorate General of Customs and Excise, physical inspection of goods, monitoring of export proceeds by Bank Indonesia, to tax audits on the fairness of transaction values. In addition, Yustinus also reminded that transfer pricing should not be directly equated with under-invoicing. According to him, transfer pricing is a common business practice in transactions between affiliated companies. “A violation only occurs if there is mispricing, namely the manipulation of price, volume, or type of goods to obtain undue profits,” he said. He explained that an under-invoicing assessment cannot be made simply by comparing selling prices. For palm oil commodities, for instance, Indonesia does not yet have a single national reference price that is fully accepted by all business actors. The government’s reference price itself is a combination of various international sources, including from the Netherlands and Malaysia. Furthermore, he noted that export prices are influenced by many commercial factors, such as the type of product (CPO, kernel, or derivative products), quality and certifications like ISPO and RSPO, the place of delivery which affects logistics costs, the timing of the transaction, and the type of contract used. Nevertheless, Yustinus stressed that companies proven to have sold far below a reasonable price without a justifiable commercial basis can still be categorised as engaging in under-invoicing. “Gapki always encourages all its members to comply with every applicable tax and trade regulation. If any are indeed proven to have committed violations, they must of course be processed according to the prevailing law,” he said.