Additional VAT will Affect Cocoa Industry, Association Says
22 August 2014 15:16 WIB
TEMPO.CO, Jakarta - Sindra Wijaya, Executive Director of the Indonesia Cocoa Industries Association, said that additional Value Added Tax (VAT) for fresh agriculture products will increase the number of cocoa beans export. Sindra asserted that the government's plan to impose zero percent export tax for cocoa beans will allow cocoa bean traders to gain more profit by exporting cocoa beans rather than selling it domestically.
"We are worried that the domestic supply of cocoa will be decreased," said Sindra in a press conference yesterday.
Sindra worried that the effects of the additional VAT will cause the national cocoa industry drop like it was before 2007, when supply of cocoa beans was scarce because of the high number of export.
He agreed that the Presidential Regulation No. 31/2007, which states that agricultural products should not be subjected to VAT, has helped the development of the national cocoa industry.
However, recent Supreme Court decision No. 70/2014 has superseded the regulation. The decision states that agricultural products from the farming, plantations, and forestry sector produced by corporate tax subject shall be imposed with a 10 percent VAT.
YOLANDA RYAN ARMINDYA