PALMOILMAGAZINE, JAKARTA – Indonesia’s Komisi Pemberantasan Korupsi (KPK) has identified a strong correlation between weak palm oil land data management and recurring corruption practices in the tax sector. Discrepancies in plantation land size records are frequently exploited as loopholes for collusion between taxpayers and tax officials.
KPK spokesperson Budi Prasetyo emphasized that the issue goes beyond individual misconduct, pointing instead to systemic governance weaknesses and inadequate digital oversight.
“Without transparent governance and full digitalization of supervision, direct interactions between taxpayers and tax officers remain highly vulnerable to transactional arrangements,” he stated in a written release on Wednesday (25/2/2026).
Also Read: Indonesia Mandates ISPO Certification for Palm Bioenergy Sector Under ESDM Regulation 3/2026
Study Findings: Mismatch Between Plantation Permits and Tax Data
The anti-graft body mapped vulnerabilities in the sector through a 2020–2021 study conducted by its Monitoring Directorate on optimizing tax revenue from the palm plantation sector.
One of the main findings was inconsistencies between land areas listed in Plantation Business Permits (IUP) and actual conditions on the ground.
In a case study in Riau, KPK found significant discrepancies between IUP land size and taxable object data categorized under Plantation, Forestry, Oil and Gas Mining, Mineral or Coal Mining, and other sectors (P5L). These mismatches are believed to erode state revenue and open space for manipulation.
Also Read: When Palm Oil Is Cornered, Can Sustainability Still Prevail?
KPK also highlighted weaknesses in tax administration systems, particularly the lack of optimal verification mechanisms for Tax Object Notification Letters (SPOP). Notably, there is no mandatory inspection requirement for taxpayers who fail to attach supporting documents to their SPOP filings.
This regulatory gap creates opportunities for data manipulation and increases the risk of state financial losses.
Upstream-to-Downstream Governance Gaps
Beyond land data discrepancies, KPK identified broader governance issues, including unsynchronized plantation licensing systems and actual land control on the ground.
From upstream to downstream segments, many Village Unit Cooperatives (KUD) and palm oil collectors still lack Taxpayer Identification Numbers (NPWP). Meanwhile, limited sector-specific databases within the Direktorat Jenderal Pajak (DJP) further weaken monitoring capacity.
“Inadequate databases do not only mean lost revenue potential; they also represent corruption loopholes. Without system integration, conflicts of interest will continue to shadow tax administration,” Budi explained.
Also Read: Dr. Iim Mucharam Appointed as New Director of Palm Crops at Agriculture Ministry
Three Strategic Recommendations
Based on its findings, KPK urged DJP to implement three priority measures:
- Expand NPWP registration for KUDs and independent smallholder farmers.
- Develop and integrate a palm oil tax application system with production data from Palm Oil Mills (PKS).
- Strengthen cross-sector data synchronization.
KPK also recommended accelerating the development of the Indicative Overlapping Map (PITTI) by involving the National Land Agency, the Ministry of Agriculture, the Ministry of Environment, and regional governments to ensure alignment between taxed land areas and actual field conditions.
On the regulatory front, the agency called for revisions to Minister of Finance Regulation No. 48 of 2021 to mandate digital verification of supporting documents for SPOP submissions, aiming to enhance transparency and accountability.
Accountability as the Core Solution
KPK affirmed that it will continue monitoring follow-up actions on these recommendations. The agency views the identified governance gaps as closely linked to recurring corruption schemes in the taxation and natural resource management sectors.
“Accountability must be the key to closing loopholes, safeguarding public trust, and ensuring that national natural resources deliver maximum benefit to the people,” Budi concluded. (P2)
