TEMPO.CO, Jakarta - Trade Minister Thomas T. Lembong sees that the imposition of tax on imported palm oil by the French government has breached the principles of the World Trade Organization (WTO) and General Agreement of Tariff and Trade (GATT) 1994.

Tom also questioned France’s reason in making the tax imposition as an agenda. According to him, based on GATT 1994 article III:2, imported products, both directly and indirectly, may not be charged by internal taxes nor other internal levies as imposed on domestic products. WTO is entitled to take required measures if any imposition is made.

According to him, the policy is not right if it is based on environmental issue. Indonesia’s palm oil industry has participated in the Roundtable on Sustainable Palm Oil (RSPO) to ensure that Indonesia’s palm oil be produced according to sustainable standards.

Indonesia has made a sustainable palm oil policy (The Indonesian Sustainable Palm Oil/ISPO). “It is to ensure that palm oil is being produced in a sustainable way and does not contribute to deforestation and climate change,” said Tom in his release in Jakarta, Friday, February 5, 2016.

Tom also said that tax imposition by France is also not right if associated with health issue. Latest study shows that palm oil’s saturated fatty acid consumption would not increase the risk of cardiovascular disease.

Palm oil tax imposition is afraid could destabilize Indonesia’s economy. Palm oil is a strategic sector, which is expected to absorb 16 million workforces. In addition, the sector has also contributed 1.6 percent to Indonesia’s GDP. Indonesia’s export income of the commodity reaches approximately US$ 19 billion per year.

In its Biodiversity Law, which would come into force in 2017, France government would impose tax on palm oil in the amount of 300 euro per ton. The tax would increase to 500 euro per ton in 2018. It would further increase to 700 euro per ton in 2019 and 900 euro per ton in 2020.

MAWARDAH NUR HANIFIYANI