Finance Minister Issues Regulation on Revision of Palm Oil Export Levy

Finance Minister Sri Mulyani Indrawati has signed a new regulation on amendment to regulation on tariff of service by the Indonesian Oil Palm Estate Fund (BPDPKS). The new regulation temporarily set levy on palm oil, Crude Palm Oil (CPO) and its derivatives export at zero as current CPO price is below US$ 570 per ton. It sets that BPDPKS will not collect levies on palm oil, CPO, and its derivatives export when CPO prices are below a threshold of US$570 per ton, but will charge between US$ 5, US$ 10, US$ 15, US$ 20, US$ 25 once CPO prices are in a range of US$570-US$619 per ton. The levy will rise to US$ 20, US$30, US$ 40, US$ 50 when prices hit above US$619 per ton. Those provision are laid down in the Finance Minister Regulation No 152/PMK.05/2018 concerning amendment to Finance Minister Regulation No 81/PMK.05/2018 concerning tariff of service by BPDPKS of Finance Ministry. It is officially signed on 4 December 2018. The amendment to PMK Number 81/PMK.05/2018 includes some revisions. Firstly, revision on attachment I. Secondly, provision on Article 4 is revised and says, “Tariff levy is decided based on price value threshold of CPO.” Thirdly, a new article is issued between Article 4 and Article 5, that is Article 4A which says: Paragraph (1): “CPO price as mentioned on Attachment I, coloum 5, 6, and coloum 7 is set based on reference price set by minister who is in charge on trade.” Paragraph (2) of Article 4A says, “Agriculture Ministry, Industry Ministry, Trade Ministry, Energy and Mineral Resources Ministry, and BPDPKS of Ministry of Finance conduct monthly evaluation on the implementation of Levy Tariff collection based on CPO price as mentioned on Paragraph (1). Paragraph (3) of Article 4A says, “Steering Committee of BPDPKS of Ministry of Finance is able to review Levy Tariff at any time as mentioned on Attachment I.” Paragraph (4) of Article 4A says, “Evaluation result as mentioned on Paragraph (2) and/or review as mentioned on Paragraph (3) is set to be the legal basis to propose service tariff revision to Finance Minister in accordance with legislation.” The new regulation officially come into force on the enactment date on 4 December 2018. The following is the attachment I as mentioned earlier: