Govt to keep CPO export tax rate at 6.5 percent

Medan, N Sumatra (Antara News) - The government will maintain the crude palm oil (CPO) export tax at the average rate of 6.5 percent as it is considered already ideal, Industry Minister Fahmi Idris said.

"The rate of CPO export tax is already ideal," the minister said when he visited an integrated CPO factory of PT Musim Mas in Medan on Tuesday.

The minister made the statement amid complaints by a number of CPO producers that the competitive edge of their CPO product had been weakened by the government`s CPO export tax of 6.5 percent.

Fahmi said the rate had been imposed in an effort to keep cooking oil prices at a moderate level and to guarantee supply in the market.

Besides, the government also hoped that with the government`s fiscal policy, growth of downstream industries could be boosted, the minister said.

Therefore, he added, the government did not impose a too high export tax rate on CPO and its downstream products such as had happened in 1998 when it imposed a 50-60 percent export tax.

The present rate is neither too low such as the previous one, which was fixed at 1.5 percent, Fahmi said.

"CPO producers should welcome the government`s latest ruling on the CPO export tax because it did not impose a high tax when the cooking oil price rose to Rp9,000 per kg," he said.

But he said the present CPO export tax was not something that could not be changed. A fiscal policy could undergo changes based on prevailing conditions.

In the meantime, the executive director of Indonesian Vegetable Oil Industry Association (GIMNI), said the government`s policy which set the rate of CPO and its down stream products export tax at the average of 6.5 percent had weakened the competitive edge of national CPO products campared with that of Malaysia.(*)
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