Government Adjusts Tariffs For CPO Export Levy And Its Derivatives To Support Sustainable Palm Oil Industry

JAKARTA - The government is committed to supporting the sustainable palm oil industry. The oil palm plantation sector is a national strategic commodity and the backbone of the national economy. Various policies have also been set by the Government to support this.

The Government's commitment to support this is also reflected in the issuance of the Minister of Finance Regulation Number 115/PMK.05/2022 concerning Amendments to the Regulation of the Minister of Finance Number 103/PMK.05/2022 concerning Service Tariffs for the Public Service Agency for Palm Oil Plantation Fund Management Agency (BPDPKS) at the Ministry of Finance, as a follow-up to the results of the Coordination Meeting chaired by the Coordinating Minister for Economic Affairs Airlangga Hartarto some time ago.

In line with the results of the meeting chaired by Coordinating Minister Airlangga, it was stated that the change in the export levy tariff to US$0/MT effective from 15 July 2022 to 31 August 2022 is expected to reduce the excess supply of CPO in the country so as to accelerate the export of CPO products and their derivatives. With the acceleration of exports, it is expected that the price of Fresh Fruit Bunches at the level of smallholders, especially independent smallholders, will increase.

Another consideration in adjusting the tariff for export levies is the sustainability of the development of support services for the national palm oil industry development program, particularly productivity improvement in the upstream sector through rejuvenation of oil palm plantations, facilities and infrastructure for oil palm plantations, particularly in the form of the construction of a Product Processing Unit, the creation of a domestic market through mandatory support for biodiesel as well as meeting food needs through funding for the provision of cooking oil for the community.

The adjustment to the export levy tariff scheme is expected to have a fair and appropriate effect on the distribution of added value generated from the domestic palm oil industry chain. The levies collected from exports are managed and redistributed to focus on developing the smallholder palm oil industry. The availability of funds from export levies can increase independent smallholders' access to funding for improving plantation productivity and bring their businesses closer to sectors that provide added value.

This policy change is also a momentum for BPDPKS to further improve its services while maintaining accountability and transparency in the management and distribution of oil palm plantation funds.

All parties are expected to continue to support the Government's policies because the Government is aware that all policies related to palm oil have the ultimate goal of creating palm oil sustainability considering the very important role of oil palm in the national economy.