Indonesian govt cuts palm oil tax -

Indonesian govt cuts palm oil tax

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Indonesian govt cuts palm oil tax

While the Indonesian Government continues to consider a flat tax for crude palm oil (CPO) exports, it has cut tax rates marginally for April shipments.

The Indonesian Government has announced it will cut CPO taxes by 2.5 percentage points to 22.5% in April, due to changes in international CPO commodity exchange prices in Rotterdam, reported

The incremental tax system has come under fire from many commentators, with calls for flat tax rates, but the April tax change has more to do with international price falls.

Director General of Foreign Trade Deddy Saleh, said the palm oil reference price was US$1,135 per metric ton (MT), the story reported.

The Association of Indonesian Oil Palm Producers (GAPKI) has called on the government to set an export tax of 3% when the global price is higher than US$700 per MT, along with export tax-free incentives for palm oil derivatives to develop industry, the story reported.

At a conference this month ISTA Mielke GmBH executive director Thomas Mielke, said global demand for palm oil would increase from 45.5 million MT to more than 62 million MT by 2015, reported The Star Online.

"Indonesia will need to boost its oil palm plantings to 350,000ha (to) 400,000ha per year to satisfy future world demand," he was quoted as saying.

This demand trend combined with United Nations forest protection plans will likely lead to higher prices for existing growers due to limited supply, reported Bloomberg.

The palm oil industry has received criticism in recent years for its treatment of the environment. Just yesterday, the Jakarta Globe reported a rare Sumatran tiger was reported dead after electrocution on a palm oil plantation in Indonesia's Jambi province.

Related story: Indonesia eyes palm oil flat tax



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