Indonesian Biofuels Committee proposes tax incentive structure to respond to rising crude palm oil prices

In Indonesia, the National Biofuel Development Committee proposed a cut in the local VAT for biofuels in order to stimulate production in the face of the rising cost of palm oil. The Committee proposed a graduated tax cut based on the price of palm oil, an approach that has been used with the palm oil export tax. Palm oil exports are taxed at a 15 percent rate if crude palm oil prices are below $1200, but rise to 30 percent if the price for CPO exceeds $1,300.

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