Gapki Urges Law Enforcement in Palm Oil Export Oversight
The Indonesian Palm Oil Association (Gapki) considers the palm oil export supervision mechanism in Indonesia to be very strict, but argues it needs further reinforcement through strengthened law enforcement against violators, such as those engaging in under-invoicing, which disrupts contributions to state revenue.
“What needs to be done is law enforcement. The supervision mechanism is already available, and Gapki always encourages all members to comply with taxation regulations,” said Gapki’s Head of Taxation and Fiscal Affairs, Yustinus Lambang Setyo Putro, in a statement in Jakarta on Saturday, 27 June 2026.
He noted that under-invoicing has come under scrutiny following the government’s issuance of Government Regulation Number 24 of 2026 regarding the Governance of Strategic Natural Resource Commodity Exports.
Furthermore, the government has established PT Danantara Sumberdaya Indonesia (DSI) as a State-Owned Enterprise (SOE) to act as the sole executor and intermediary for the export of three strategic commodities—namely palm oil, coal, and ferroalloy—to increase transparency and close loopholes for under-invercing practices.
Yustinus explained that export supervision is conducted through multiple layers, ranging from the licensing process via the Indonesia National Single Window (INSW), the Directorate General of Customs and Excise’s CEISA system, physical inspections of goods, monitoring of export proceeds by Bank Indonesia, to tax audits regarding the fairness of transaction values.
Additionally, Yustinus 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. Yustinus explained that assessing under-invoicing cannot be done solely by comparing selling prices.
In the case of palm oil commodities, for example, Indonesia does not yet have a single national reference price that is fully accepted by all business players. The government’s reference price itself is a combination of various international sources, including those from the Netherlands and Malaysia.
Furthermore, export prices are influenced by many commercial factors, such as the type of product (CPO, kernel, or derivatives), quality and certification such as ISPO or RSPO, the delivery location which affects logistics costs, transaction timing, and the type of contract used.
Nevertheless, Yustinus emphasised that companies proven to be selling far below fair market prices without justifiable commercial grounds can still be categorised as engaging in under-invoicing.
“Gapki always encourages all its members to comply with all applicable taxation and trade regulations. If any party is proven to have committed a violation, they must certainly be processed according as the applicable law,” he concluded.