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Indonesia has started collecting palm oil export levy: govt

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Indonesia began collecting a levy on palm oil exports on Thursday after weeks of delay, a government official said on Wednesday, with the aim of adding up to 4.5 trillion rupiah (S$458.7 million) this year to state coffers.

[JAKARTA] Indonesia began collecting a levy on palm oil exports on Thursday after weeks of delay, a government official said on Wednesday, with the aim of adding up to 4.5 trillion rupiah (S$458.7 million) this year to state coffers.

The new levy requires exporters to pay US$50 per tonne for crude palm oil shipments and US$30 for shipments of processed palm oil products. It only kicks in when an existing export tax is cut to zero - which happens when a reference price drops below US$750 a tonne.

The government received about 21 billion rupiah in payments on the first day of collection last week, Indonesia Estate Crop Fund Agency Director Dadan Kusdiana told reporters.

Part of the proceeds from the levies will be used to help fund Indonesia's biodiesel subsidies that were introduced to help cut the country's oil import bill and to soak up excess palm oil at the world's top producer of the tropical oil.

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The agency expects to provide a subsidy of between 600-700 rupiah per litre for biodiesel. "We have agreed we need some capital for the subsidy, so we'll collect the levy first for a month and then we'll start the biodiesel subsidy," Mr Kusdiana said, adding that the agency will provide around 3 trillion rupiah for the biofuel subsidy this year.

Indonesia expects the levy to generate up to 10 trillion rupiah of revenue on an annual basis.

REUTERS

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