JAKARTA: Indonesia plans to tighten control over commodity exports including coal and palm oil, according to people familiar with the matter, as the government seeks to clamp down on tax evasion and bolster a plunging rupiah.
The government is planning to create a new state entity to manage exports of the commodities in order to crack down on under-invoicing, according to the people.
The agency would be supervised by Danantara, the sovereign wealth fund that reports directly to President Prabowo Subianto, and could be announced by the president this week, they said.
Details of how the body will function need to be ironed out and are in a state of flux at the moment, they added.
The country’s benchmark stock index rose 0.6% in early trading yesterday, recovering slightly from a 3.5% sell-off the day before that traders attributed to speculation about the new body.
The agency would be Prabowo’s most drastic move yet to shore up state revenue to support his expensive flagship policies including universal free school meals.
Those programmes, along with a rising energy import bill and broader investor concerns about deteriorating governance in South-East Asia’s largest economy, sent the Indonesian rupiah to a record low against the dollar this week.
Indonesia is the world’s top exporter of thermal coal and palm oil, and greater state control of shipments could roil global markets for the commodities. — Bloomberg
