Indonesia`s Halal Food Exports On The Rise

Indonesia`s halal food exports are on the rise. The total monetary value of these exports is estimated at US$229 million.  So far, the country has exported 10 processed foods.  It expects to increase its exports in the future as it plans to become a major halal hub in the region.  To achieve high growth in the export of halal foods to various countries, it is providing incentives to local halal food exporters.  Indonesian Finance Minister Sri Mulyani Indrawati said this in an online seminar titled “Indonesia towards the Center for World Halal Producers”

The State Treasurer specified that the 10 types of halal processed food the country is exporting consisted of margarine, wafers, biscuits, processed pineapple, packaged coffee, coffee extract, and malt extract, sauces, baby food, bread, and cakes. These items are very popular among the consumers in their target markets of 29 countries. The most popular among these items are margarine or similar products that are related to crude palm oil (CPO) and its derivatives. However, he expects the country to start exporting a few other products as well to its target markets in the near future.

“We still have a big opportunity for our export share of up to 61 percent. This should be used by Indonesia to increase several other products as well,” he explained.

The government itself provides fiscal incentives to encourage investment and export of halal products. These incentives are delegated to the Investment Coordinating Board (BKPM) so that BKPM can immediately provide various incentives for investment in high-priority areas. Therefore, the government wants to ensure that the halal industry receives various stimuli in terms of income tax facilities. The other incentives include a tax holiday, tax allowance, reduced import income tax, the super deduction for research, and vocational training.

The government also provides incentives in customs and excise facilities in the form of exemption or return of import duties to companies such as Ease of Import for Export Purposes (KITE). The government bears the import duty in certain industries to achieve the export targets in the specified products. “There are also incentives from value-added tax (VAT) facilities that will be provided, such as VAT reduction for capital goods, health and education services, social services, and export services,” he added. Finally, various special facilities to support increased exports of halal products. Among them are facilities in special economic zones (KEK), facilities in free trade zones, and facilities in industrial areas.