Closing the Palm Oil Revenue Gap: A Review of Policy Options to Address Under-Invoicing, Mis-Invoicing, and Transfer Pricing in Indonesia’s Palm Oil Exports

The export of palm oil is crucial for Indonesia's foreign exchange and fiscal revenue, but its cross-border transactions face risks of under-invoicing, mis-invoicing, and transfer pricing that can reduce the tax base and export levy. This study qualitatively examines academic literature, regulations, and the experiences of other countries. The results indicate that trade data discrepancies should only serve as risk indicators, not as evidence of violations. The recommended policies include the integration of tax and customs data, dynamic reference price corridors, audits of affiliated transactions, transparency of beneficial ownership, post-clearance audits, and proportional sanctions. A risk-based approach is deemed capable of protecting state revenue without disrupting the palm oil value chain and compliant exporters.