JAKARTA – Palm oil industry players broke silence about the Indonesian government’s allegation of tax evasion at around Rp 300 trillion in the top industry of the country.
The Indonesian Palm Oil Association’s (GAPKI) Chairman Eddy Martono said that the accusation stems from the government’s decision to conduct legal whitewashing on certain oil palm plantation areas suspected to have encroached forest areas. When implementing the whitewashing, the government received a report from the palm oil governance improvement task force (Satgas Sawit) and the finance and development supervisory board (BPKP) that there were companies breaking the prevailing laws by encroaching the forest areas.
In solving the palm location problem, the government applied the omnibus law on job creation (UU Cipta Kerja), particularly its articles 110A and 110 B. The article 110A stipulates that companies found operating their plantations in forest areas, but having business permits, can continue their plantation businesses provided that they fulfill all requirements within the period of maximum three years.
The article 110B stipulates that companies operating their plantations on forest areas, but having no business permits, can only continue their palm plantation for just one cycle of cultivation by paying administrative fines.
According to Eddy, member companies of GAPKI have complied with the prevailing regulations, especially with regard to the two articles. “Regarding the article 110A of UU Cipta Kerja, our member companies have fulfilled the requirements set by the government,” Eddy said.
He said that concerning the suspected violation of article 110A, GAPKI was informed that there are about 700,000 hectares of forest areas used by the palm industry players without permits. But he did not elaborate the size of palm plantations owned by GAPKI member companies, which violate the article 110A. “But almost all of GAPKI members which are indicated subject to violation of the article 110A had made payments,” he said.
But with regard to the suspected violation of article 110B, Eddy said that palm oil industry players have not yet paid the administrative fines, including taxes, set by the government, as they are still waiting for the notification letters from the ministry of environment and forestry (KLHK). “Until now, they haven’t yet received such letters. So, they don’t know what to do,” he said.
Previously, in April 2024 Eddy revealed that possibly the fines to be paid by GAPKI member companies due to the violation of article 110B could amount to around Rp100 – 130 million per hectare. But the fines to be paid based on the violation of article 110A was claimed to be in smaller amount. But he said he did not know the exact emount of fine already paid to the government. “The fine due to violation of article 110B is around Rp100 – 130 million per hectare. The fine under the article 110A is not that much. But regarding the article 110B fine, there has been no notification letters from KLHK,” he said.
Recently, Hashim Djojohadikusumo, deputy chairman of advisory board of Gerindra Party, who is also the younger brother of President-elect Prabowo Subianto, said that 300 palm oil players are suspected to evade tax payment up to Rp300 trillion. He said that Prabowo will go after them and make them paying the taxes. “Prabowo got the data of the companies from Maritime and Investment Coordinating Minister Luhut Binsar Pandjaitan and BPKP Chairman Muhammad Yusuf Ateh,” he said when addressing an economic discussion organized by the Indonesian Chamber of Commerce and Industry (KADIN) in Menara Kadin, Jakarta, on Monday (7/10/2024). (*)
