INDONESIA DROPS ON VAT AGRICULTURE PRODUCTS

JAKARTA, April 2 (Reuters) - Indonesia said on Monday it had dropped a10 percent value-added tax on agriculture products because of theirimportance to the economy."The move was taken in view of that agriculture products...are neededto support national economic activities," the finance ministry said in astatement.The tax was imposed on January 1 on products such as coffee and cocoabeans, tea, pepper, sugarcane, oil palm fresh fruit bunches and otheragricultural products. But some staple products such as rice, corn,soybeans and salt were exempt.According to the statement, animal feed and raw materials for animalfeed are also now exempt.The tax was strongly opposed by farmers as well as businessassociations, which complained it would make Indonesian products lesscompetitive.