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View all search resultsGovt mandates coal, CPO exports through state agency
Speaking before the House of Representatives’ plenary on Wednesday, Prabowo said the policy was aimed at curbing under invoicing and transfer pricing, in which exporters underreport shipment volumes to reduce tax obligations.
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Coal storage barges float in a yard next to the Batanghari River in Muaro Jambi, Jambi, on May 6, 2024. (Antara/Wahdi Septiawan)
P
resident Prabowo Subianto has announced that exports of certain commodities will eventually be conducted through a single state-owned enterprise (SOE) to tighten control over the loss of state revenue due to fraudulent practices, but industry analysts have warned this could result in a monopoly.
Speaking before the House of Representatives’ plenary on Wednesday, Prabowo said the policy was aimed at curbing under invoicing and transfer pricing, in which exporters underreport shipment volumes to reduce tax obligations.
He called the policy “a strategic step to strengthen the governance of natural resource commodity exports” and claimed that dealing with the fraudulent practices “could potentially [generate a revenue of] around US$150 billion annually”.
The first three commodities subject to the first stage of enforcement are crude palm oil (CPO), coal and ferroalloys. Coordinating Economy Minister Airlangga Hartarto said in a press conference after the plenary that the list would be expanded to “all strategic natural resource commodities” in the next stage.
Investment and Downstream Minister Rosan Roeslani said in the same press conference that the body, called Danantara Sumberdaya Indonesia (DSI), will undergo a trial from June to September, followed by an evaluation in the fourth quarter and full enforcement in January 2027. For the trial run, the activity will only involve export filing to the body.
Airlangga said export transactions of the three commodities would still be directly conducted between exporting companies and buyers during the trial run. However, the SOE would afterward take over all export processes, encompassing contracts, delivery and payments.
Rosan said the new SOE then would monitor if the filing “reflects the reasonable value” in accordance with the global price index, with eyes set on both the buyers and exporters. He said the goal was to prevent the fraudulent practices via enforcing transparency in “volumes, pricing, delivery and other procedures”.
