Producers of cooking oil are asking the government to provide incentives to promote the sales of branded and packaged cooking oil as consumers currently preferred the cheaper unpackaged version, the Association of Vegetable Oil Industries (GIMNI) said.
GIMNI, in a report uploaded on the official website of the Indonesian Association of Palm Oil Producers (GAPKI) on Monday, April 2, 2018, said that the incentive could take the form of the government taking over the tax usually paid by producers.
“We expressed to the minister of trade that nowadays, people were not too interested in buying packaged cooking oil because the prices are expensive,” GIMNI Executive Director Sahat Sinaga is quoted as having told KONTAN in the report.
Sinaga said that one of the ways to increase interest in packaged cooking oil is by providing the tax incentive so that the prices can compete with those of unpackaged oils. The incentive could be provided until December 2019 as the government is planning that in 2020, all cooking oil produced are packaged ones.
Simple packaged cooking oil is sold at Rp 11,000 – Rp12,000 per liter while unpackaged ones are sold at Rp 10,500 per liter.
The government currently imposes $30 duty for the export of one ton of Refined, Bleached, and Deodorized (RBD) palm oil and $25 for RBD palm oil under 25 kilograms of packaging. Sinaga wants the duties to be respectively lowered to $5 and $2.
The Director-General for Domestic Trade at the Trade Ministry, Tjahja Widayanti said that the matter of tax incentives came under the authority of the Coordinating Ministry for the Economy and not the trade ministry.