Cocoa Farmers Refuse The Imposition Of 10% VAT

Jumat, 22 Agustus 2014 | 08:49

The Indonesian Cocoa Farmers Association (APKAI) will send President Susilo Bambang Yudhoyono a letter related to the verdict of the Constitutional Court No.70/2014 on the imposition of value added tax for fresh agricultural, plantation, and forestry products at 10%.Chairman of Indonesian Cocoa Farmers Association Arief Zamroni considered the decision would highly affect the continuity of farmers’ business caused by the price pressure as burdened to the businessmen.

“The decision would extremely hit the farmers. We will send the President a letter to review the implementation of the regulation,” he said, as cited by Indonesia Business Daily (8/20/2014).

According to him, the material test submission as made by Indonesian Chamber of Commerce and Industry (Kadin) was initially aimed for palm, yet the Constitutional Court decided to impose it to some other products such as cocoa, coffee, nutmeg, cashew kernels, pepper, clove, and gum.

He further said that it would lead to a lower competitiveness of domestic cocoa.

“Our agricultural production will be weakening. If it is very harmful for cocoa then there will be a switch to other products,” he said.

The industry is likely to use imported cocoa products than the domestic products of with higher prices due to the tax imposition.

Based on the data as compiled by APKAI, the cocoa production reached 650,000 tons in 2013. The production is distributed in the country specially used for the industries and imported.

by Irene Agustine