KONTAN.CO.ID - JAKARTA. Indonesia on Tuesday issued regulations backing recently announced changes on a palm oil export tax policy, including cutting the maximum levy rate to accelerate shipments that have been slow to rebound after the ending of an export ban.

But the levy rate will be raised in August, according to the finance ministry regulations, sparking concerns from an industry group.

Indonesia, the world's biggest palm oil exporter, allowed palm shipments to resume from May 23 following a three-week export ban designed to boost cooking oil stocks and keep runaway local prices in check.

Authorities have since launched an export acceleration programme and tweaked tax rules after shipments were slow to restart amid confusion over procedural issues.

Details of Tuesday's regulations were in line with previous announcements, including lowering the maximum levy rate for crude palm oil to $200 a tonne from $375, effective until July 31.

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Indonesian exporters pay a levy and an export tax on shipments and the government last week announced a hike in the maximum export tax to $288 per tonne.

Overall, the combined ceiling for both the levy and tax would be reduced to $488 per tonne from $575 per tonne to boost exports.

The new rates apply to sales that are tied to the domestic distribution of cooking oil. The trade ministry recently bumped up the allocation for such exports to 2.25 million tonnes, from around 1 million previously.

Separately, under the export acceleration programme companies are allowed to sell stocks built up during the export ban without having to join domestic cooking oil programmes. But they will have to pay a higher export tax of a maximum $488 a tonne for crude palm oil, bringing the combined levy and tax to $688 a tonne.

Indonesia had approved export permits as of Monday for 1.16 million tonnes of palm oil products under the programme, which expires on July 31.

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The export acceleration programme has helped companies to empty their storage tanks, Eddy Martono, secretary general of the palm oil industry group GAPKI told Reuters.

But he warned to avoid hurting farmers authorities should assess the international palm oil price and domestic fresh fruit bunch price before imposing a hike in export levy rates beginning Aug. 1 "so we can avoid a case when the price goes down and the levy is raised."

Editor: Anna Suci Perwitasari