Indonesia is one of the largest producers of crude palm oil (CPO) in the world and exports a significant amount of its production. In order to regulate this export, the Indonesian government has implemented a tax known as the Bea Ekspor CPO or the CPO Export Tax. This tax has caused some confusion and controversy in the industry, so let’s take a closer look at what it is and how it works.
What is the Bea Ekspor CPO?
The Bea Ekspor CPO is a tax imposed on the export of crude palm oil from Indonesia. It was first introduced in 2011 with the intention of regulating the export of CPO and increasing the domestic supply of the commodity. The tax is calculated as a percentage of the FOB (Free on Board) price of CPO exported from Indonesia.
Initially, the tax rate was set at 2.5%, but it has been revised several times since then. In 2015, the tax rate was increased to 7.5% for CPO with a reference price of less than $750 per tonne and 22.5% for CPO with a reference price of more than $950 per tonne. In 2016, the tax rate was lowered to 0% for CPO with a reference price of less than $750 per tonne, 3% for CPO with a reference price between $750 and $800 per tonne, and 18% for CPO with a reference price of more than $800 per tonne.
How is the tax calculated?
The Bea Ekspor CPO is calculated based on the FOB price of CPO exported from Indonesia. The FOB price is the price that the buyer pays for the goods at the port of shipment, which includes the cost of the goods and the cost of loading them onto the vessel. The tax rate is then applied to this FOB price to determine the amount of tax to be paid.
For example, if the FOB price of CPO is $800 per tonne and the tax rate is 18%, the tax payable would be $144 per tonne. This tax is paid by the exporter to the Indonesian government.
Why was the tax introduced?
The Bea Ekspor CPO was introduced for several reasons. One of the main reasons was to encourage the domestic processing of palm oil in Indonesia. By imposing a tax on the export of crude palm oil, the government aimed to make it more attractive for companies to refine the oil domestically rather than exporting it in its raw form.
Additionally, the tax was intended to increase government revenue from the export of CPO. Indonesia is heavily reliant on the export of commodities such as palm oil, coal, and natural gas, and the government saw the Bea Ekspor CPO as a way to increase revenue from these exports.
What are the effects of the tax?
The Bea Ekspor CPO has had several effects on the Indonesian palm oil industry. One of the most significant effects has been on the price of CPO in the domestic market. By making it more attractive for companies to refine palm oil domestically, the tax has increased the demand for crude palm oil in Indonesia, which has driven up prices.
On the other hand, the tax has made it more expensive for companies to export crude palm oil, which has reduced the competitiveness of Indonesian palm oil in the international market. This has led to a decline in the volume of CPO exports from Indonesia in recent years.
Controversies surrounding the tax
The Bea Ekspor CPO has been the subject of controversy since its introduction. The tax has been criticized by some industry players for making Indonesian palm oil less competitive in the international market and reducing the profitability of palm oil exports.
However, supporters of the tax argue that it has had a positive impact on the Indonesian economy by increasing government revenue and encouraging the domestic processing of palm oil.
Conclusion
The Bea Ekspor CPO is an important tax for the Indonesian palm oil industry. While it has been controversial, it has also had a significant impact on the domestic demand for crude palm oil and government revenue from exports.
Understanding the Bea Ekspor CPO is essential for any company involved in the Indonesian palm oil industry. By knowing how the tax is calculated and its effects on the market, companies can make informed decisions about their business operations and pricing strategies.
