Agriculture Ministry proposing PPN exemption on CPO

Jakarta (Antara News) - Agriculture Minister Anto Apriyanto said here on Tuesday he had proposed a value-added tax (PPN) exemption on crude palm oil industries for the development of the commodity in its downstream sector.

He said producers of CPO and its derivatives had yet to enjoy the 10 percent tax exemption so far enjoyed by producers of other agricultural commodities.

"We have long proposed for a PPN exemption, but we cannot make a decision ourselves, as it has to be discusse with some other ministries. We are indeed considering it," he said on the sidelines of a seminar on the commodity.

He said the PPN exemption was indeed one of the alternatives to persuade CPO producers to process their produce into food or biofuel.

The minister also said the government had started worrying about ownership of oil palm plantations by a holding company.

"For the time being we have no intention to limit such ownership, but we are still thoroughly studying the possibility. We are not in a hurry, but we have already noted a fear for a too large control by a holding company. And are still seeking a way out," he said.

He said the limitation was intended to anticipate foreign investors` invasion and environmental damage.

He said under the present regulation, a company could secure a maximum of 100,000 hectares, but curretnly there is no regulation on land ownership by a holding company that could have many subsidiaries.

He said if a group was allowed to hold a vast plantation it could develop into a cartel.

Asked if the idea about limiting ownership by a holding company was linked to the case of a Malaysian company`s expansion, the minister said it was one of the reasons.

He said the idea was still being discussed by the relevant ministries. "basically, we do not allow a holding company to have a dominant control," he said.(*)
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