Gapki Urges Law Enforcement in Palm Oil Export Oversight

The Indonesian Palm Oil Association (Gapki) considers the existing oversight mechanism for palm oil exports to be very strict, but believes it needs to be reinforced with stronger law enforcement against violators, such as those engaging in under invoicing, which disrupts state revenue contributions. “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, 27 June 2026. He noted that under invoicing came under scrutiny after the government issued Government Regulation Number 24 of 2026 concerning the Export Governance of Strategic Natural Resource Commodities. 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 ferro alloy—to enhance 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. Additionally, Yustinus cautioned against equating transfer pricing directly 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 merely by comparing selling prices. For palm oil commodities, for instance, Indonesia does not yet have a single national reference price 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. Moreover, export prices are influenced by many commercial factors, such as the type of product (CPO, kernel, or derivative products), quality and certifications like ISPO or RSPO, the delivery location affecting logistics costs, transaction timing, 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 certainly be processed according to the prevailing law,” he said.