30/08/2007 (Reuters), JAKARTA - Indonesia plans to scrap a 10 percent value-added tax (VAT) on crude palm oil sold to cooking oil processors and peg a tax on palm oil exports to global prices to ease local cooking oil prices, Agriculture Minister Anton Apriyantono said on Wednesday.

Apriyantono said by scrapping value-added tax producers would be more interested in processing crude palm oil at home. “Scrapping value-added tax will be an incentive for producers to process crude palm oil at home instead of exporting it because it will be cheaper,” Apriyantono said. He said part of the policy would also be to raise the palm oil export tax.

“The (increase) in palm oil export tax will help curb exports. The tax will move in line with international It could be raised to 10 percent depending on the prices,” he added. “I think it is fair for a long-term solution,” the minister said.

Reuters