InfoSAWIT, JAKARTA – Indonesia's palm oil industry already operates under a comprehensive export monitoring system involving multiple government agencies, meaning efforts to improve governance should focus on consistent law enforcement rather than introducing additional regulations, according to the Indonesian Palm Oil Association (GAPKI).

The view was presented 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?"

Yustinus explained that every palm oil export shipment passes through several layers of supervision before leaving Indonesia. The process includes export approval through the Indonesia National Single Window (INSW), document verification using the Directorate General of Customs and Excise's CEISA system, physical inspections for selected commodities, and foreign exchange monitoring via Bank Indonesia's Integrated Foreign Exchange Monitoring System (SIMODIS).

In addition, the tax authority has mechanisms to assess whether export transaction values comply with the arm's-length principle through tax audits.

"Indonesia's existing monitoring system is already very strict. What we need is stronger law enforcement. The supervisory mechanisms are already in place," Yustinus said in remarks cited by InfoSAWIT from IKPI.

He added that palm oil exporters must also fulfill numerous fiscal obligations before products can be shipped overseas. Besides paying export duties to the Directorate General of Customs and Excise, exporters are required to pay export levies to the Public Service Agency of the Indonesian Oil Palm Plantation Fund (BPDP) and comply with Indonesia's Domestic Market Obligation (DMO) requirements before export quotas are granted.

For companies conducting 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 transactions are conducted at fair market value.

If pricing is found to deviate from the arm's-length principle, tax authorities are empowered to issue tax assessments together with administrative sanctions in accordance with prevailing regulations.

While acknowledging that some companies have violated regulations, including through commodity misclassification, Yustinus stressed that such cases are isolated and should not be viewed as representative of Indonesia's overall palm oil industry.

He said GAPKI continues to remind its members to comply fully with tax obligations and trade regulations.

"If any company is proven to have violated the law, it should certainly be processed in accordance with applicable legal provisions," he said.

Yustinus expressed hope that coordination among government agencies overseeing palm oil exports would continue to be strengthened through consistent law enforcement, helping maintain investor confidence, improve industry compliance, and ensure the sector continues to make a significant contribution to Indonesia's economy and state revenues. (T2)