Friday, October 28, 2011

Tax change effect on palm oil business

Indonesia change its policy of export tax provision of palm oil derived products obtain business reaction from buyer country such as India. The Hindustan country is planning to raise import tariffs of those commodities that will go into their country.
Anticipating the release of the policy, the traders in the country of Hindustan is buying more palm oil derivative products such as RBD olein from Indonesia. A total of 50,000 tons of that olein has been bought by the importer from India. The sources from Indonesia traders and India said the purchase was also a part to anticipate the demand for festivals or holidays in India. The edible oil processing industry in India is driving the government to raise import tariffs of those commodities from 7.7% to 16.5%. This is to protect the their industry interests which is now experiencing idle.
Secretary General of Indonesian Palm Oil Association (Gapki) Joko Supriyono said not know about that action from India. But clearly the current government of India will raise the its import tariff. He explained the presence of Minister of Finance Regulation No. 128/PMK.011/2011 on Regulation Amendment of the Minister of Finance Number 67/PMK.011/2010, it change the set of export tax on palm oil business is more expensive 0.5% to 4.5% from the previous.
"With India raise Indonesia CPO import tariffs became increasingly uncompetitive as it is subjected to the tax both in the producer country and also the destination country," he said.
Joko said India and Indonesia have the same interest-related to the CPO trade between the two countries. But with the government policy to change the rules so Indonesia palm oil products is more uncompetitive.
"Yes, it is strange (situation), if the state imposed a policy of import tariffs, then it is normal, but Indonesia also imposed a policy of export tariff," he said.
In addition to the change in export tax in accordance with the Minister of Finance Regulation No. PMK 128/PMK.011/2011, the Indonesia government has also added a total of 14 palm oil derived commodities(downstream products) are subject to tax exports. Previously those items, include crude palm oil (CPO), which is subjected to exports tax only amounted to 15. Thus there are 29 oil derivative products are subject to tax exports.
It is set in the Minister of Trade Regulation (Permendag) No. 26/M-DAG/PER/9/2011 which is officially assigned at September 14th 2011. HPE as many as 14 palm oil derivative products are subjected to export tax that starting from September 14th 2011 until September 30th , 2011.

Related archieves:
World palm oil production
Palm oil products
Coconut-based industry
Processing of copra from coconut
World palm oil producers

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