JAKARTA: Indonesia yesterday issued regulations backing recently announced changes on a palm oil export tax policy, including cutting the maximum levy rate to accelerate shipments that have been slow to rebound after the ending of an export ban.
But the levy rate will be raised in August, according to the finance ministry regulations, sparking concerns from an industry group.
Indonesia, the world’s biggest palm oil exporter, allowed palm shipments to resume from May 23, following a three-week export ban designed to boost cooking oil stocks and keep runaway local prices in check.
Authorities have since launched an export acceleration programme and tweaked tax rules after shipments were slow to restart amid confusion over procedural issues.
Details of yesterday’s regulations were in line with previous announcements, including lowering the maximum levy rate for crude palm oil to US$200 (RM884) a tonne from US$375 (RM1,658), effective until July 31.
Indonesian exporters pay a levy and an export tax on shipments and the government last week announced a hike in the maximum export tax to US$288 (RM1,273) per tonne.
Overall, the combined ceiling for both the levy and tax would be reduced to US$488 (RM2,157) per tonne from US$575 (RM2,542) per tonne to boost exports. The new rates apply to sales that are tied to the domestic distribution of cooking oil.
The trade ministry recently bumped up the allocation for such exports to 2.25 million tonnes, from around 1 million previously.
Separately, under the export acceleration programme, companies are allowed to sell stocks built up during the export ban without having to join domestic cooking oil programmes. But they will have to pay a higher export tax of a maximum US$488 (RMRM2,157) a tonne for crude palm oil, bringing the combined levy and tax to US$688 (RM3,041) a tonne.
Indonesia had approved export permits as of Monday for 1.16 million tonnes of palm oil products under the programme, which expires on July 31. — Reuters