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The sheer power of the plantation mafia is apparent from the conduct of hundreds of oil palm companies in Riau Province. At a time when the state is trying to increase revenues, hundreds of these companies avoid paying taxes on their income, on value added and on their land and buildings.
Ridiculously, this has continued for years because hundreds of companiesalmost a third of the oil palm plantations in Riaudo not have taxpayer ID numbers. The Corruption Eradication Commission (KPK) has said this might well be costing the state up to Rp15 trillion per year.
The Oil Palm Plantation Funds Management Agency (BPDPKS) has not violated any rule with regards to it use. Established as a public service agency, it has a free hand to use the funds as it deems necessary. But it is precisely this free hand that is raising questions, such as mis-targeted allocations which could undermine the very objective of the Fund's establishment.
The allocation of the Fund, a collection of levies on oil product exports and annual fees from oil palm plantation companies, has come under scrutiny. A major portion of the Fundsa whopping Rp3.26 trillion out of Rp9.7 trillioncollected from July 2015 to March 2016, had been dispensed to biofuel companies, not to render the oil palm plantation industry more sustainable.
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