Article

The Impacts Of Export Tax Policy On The Indonesian Crude Palm Oil Industry

Associate Professor, Department of Resource and Environmental Economics, IPB, Kampus IPB Darmaga, 16680, Bogor, Indonesia
01/2009; 15:107-119.

ABSTRACT

The impacts of the crude palm oil (CPO) export tax policy on the Indonesian CPO industry was assessed the 2SLS method which is an econometric model. The export tax was found to be negatively related to mature area of oil palm plantation, production, export, and domestic price of CPO and positively related to CPO consumption and stock. The export tax policy benefitted the domestic consumers of CPO. Clearly, the export tax policy reduces competitiveness of the Indonesian palm oil industry since it hurts producers of CPO. It is recommended that the export tax formulation with well considered and sound justifications is needed and from the study, 11.13 percent export tax on Indonesian CPO was recommended.

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Available from: Yusman Syaukat, Feb 23, 2015
    • "In terms of export tax policy on the Indonesia crude palm oil (CPO), there are some studies such as those conducted by Obado et al. (2009) and Rifin (2010). Using the 2SLS method econometric model, Obado et al. (2009) found that export taxes had a negative relationship to mature area of oil palm plantations, production, export, and domestic price of CPO, but a positive relationship to CPO consumption and stocks. The export tax benefitted domestic consumers at the cost of competitiveness reduction of Indonesian CPO in international markets. "
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    ABSTRACT: In May 2012, the Indonesian government implemented a series of new mineral export restrictions: (1) Regulation of Minister Energy and Mineral Resources (MEMR) No. 7/2012 to ban export of unprocessed metals and non-metallic minerals and then revised by Regulation of MEMR No. 11/2012; (2) Regulation of Minister of Trade (MOT) No. 29/M-DAG/PER/5/2012 to clarify the position on exports of unprocessed minerals and ores; and (3) Regulation of Ministry of Finance (MOF) No. 75/PMK.011/2012 to impose export tax on these commodities. The main objective of these series of regulation is to increase the value added of the domestic processing industries as stipulated at Law No.4/2009 through giving incentives on minerals processing industries and disincentives (impose tax) on unprocessed minerals. This study analyses impact of these new mineral export restriction policies to the Indonesian economy within a computable general equilibrium (CGE) framework. The model’s database consolidated from three key data sources: (a) the 2005 Indonesian Input-Output (IO) Table; (b) the 2005 Indonesian Social Accounting Matrix (SAM); and (c) the 2005 National Socioeconomic Survey (Susenas). All the data were published by BPS-Statistics Indonesia. This study investigates how the export tax policy affects the country’s economy not only at a macro-level, such as the impact on economic growth, industrial output, and employment, but also at a micro-level, such as the impacts on poverty and income distribution.
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