PALMOILMAGAZINE, JAKARTA – The Indonesian Palm Oil Association (GAPKI) has emphasized that Indonesia’s palm oil export monitoring framework is already comprehensive, arguing that efforts to improve governance should prioritize consistent law enforcement rather than creating new regulations.
The statement was delivered by Dr. Yustinus Lambang Setyo Putro, Chairman of GAPKI’s Taxation and Fiscal Affairs Division, during an Indonesian Tax Consultants Association (IKPI) webinar titled “Under-Invoicing and State Revenue Leakage: Perception or Reality?” held on Friday.
According to Yustinus, palm oil exports are subject to multiple layers of oversight involving various government agencies throughout the export process.
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The monitoring begins with export approval through the Indonesia National Single Window (INSW), followed by document verification using the Directorate General of Customs and Excise’s CEISA system, physical inspections for selected commodities, and export foreign exchange monitoring through Bank Indonesia’s Integrated Foreign Exchange Monitoring System (SIMODIS).
In addition, Indonesia’s tax authority has the power to assess whether export transaction values comply with the arm’s-length principle through tax audits.
“In my view, Indonesia’s existing system is already very strict. What we need is stronger law enforcement. The monitoring mechanisms are already in place,” Yustinus said, as quoted by Palmoilmagazine.com from IKPI on Tuesday (June 30).
He noted that palm oil exporters must also fulfill several fiscal obligations before shipments can leave the country. Besides paying export duties to the Directorate General of Customs and Excise, exporters are required to pay export levies to the Plantation Fund Management Agency (BPDP) and comply with the Domestic Market Obligation (DMO) policy to secure export quotas.
For companies engaged in transactions with affiliated entities, Indonesian tax regulations also require comprehensive transfer pricing documentation, including a master file, local file, and Country-by-Country Report (CbCR). These documents enable tax authorities to evaluate whether intercompany pricing reflects fair market value.
If authorities determine that transaction prices do not comply with the arm’s-length principle, they are authorized to issue tax assessments and impose administrative penalties in accordance with prevailing regulations.
While acknowledging that some businesses have committed violations, such as misclassifying export commodities, Yustinus stressed that these cases are isolated and should not be viewed as representative of Indonesia’s palm oil industry as a whole.
He added that GAPKI consistently reminds its members to comply with tax obligations and all applicable trade regulations.
“If any company is proven to have violated the law, it should be prosecuted in accordance with the applicable legal framework,” he said.
Looking ahead, Yustinus expressed hope that the coordination among government agencies overseeing palm oil exports would continue to be strengthened through consistent law enforcement. Such an approach, he said, is essential for maintaining investor confidence, improving regulatory compliance, and ensuring that Indonesia’s palm oil industry continues to make a significant contribution to state revenues and the national economy. (P2)
