03/05/2011 (Jakarta Globe) - Indonesia will not make large-scale changes to the way it works out its palm oil export tax, the deputy agriculture minister said on Friday.

Late last year, the Indonesian industry ministry said Southeast Asia's largest economy would "restructure" its export tax policy on crude palm oil, as the levy has not spurred more local processing into downstream products as intended.

"The system will not change — we only make some fine-tuning of the numbers," deputy agriculture minister Bayu Krisnamurthi told Reuters on the sidelines of a conference.

He added that an announcement would hopefully be made "soon" by the ministry of finance. Industry ministry official Benny Wachjudi said in October, that the government was planning to provide fiscal incentives to encourage investment in downstream agricultural industries.

The existing CPO export tax system, aimed at securing domestic supply and reducing volatility in cooking oil prices, allows the government to impose tax rates from 1.5 to 25 percent. 

Trade ministry and industry officials meet every month to decide the tax rate for the following month, using the average spot CPO prices in Rotterdam in the preceding 30 days as a reference price.

Exporters had paid lower tax of between 3.0 and 4.5 percent until August last year. Prices began to pick up from September as erratic weather hurt production in Malaysia and Indonesia.