In the landscape of Indonesian international trade, the forestry sector remains a cornerstone of the national economy. To manage the sustainability of natural resources and ensure the domestic availability of raw materials, the government implements a fiscal policy known as Wood Export Duty. This levy is not merely a revenue-generating tool but serves as a regulatory mechanism to encourage downstream processing within the country. For exporters and business entities, understanding the nuances of how these duties are calculated—specifically regarding the Export Price (Harga Ekspor) set by the government—is essential for compliance and financial planning.

The legal framework for this policy is rooted in Pasal 5 ayat (1) Peraturan Pemerintah Nomor 55 Tahun 2008 concerning the Imposition of Export Duty on Export Goods. This regulation mandates the Minister of Finance to establish specific Export Prices which then serve as the basis for calculating the duty payable. Furthermore, the technical implementation is governed by Peraturan Menteri Keuangan Nomor 106/PMK.04/2022 regarding the Collection of Export Duty and Peraturan Menteri Keuangan Nomor 38 Tahun 2024 as amended by Peraturan Menteri Keuangan Nomor 68 Tahun 2025. These regulations define which goods are subject to duty and the applicable rates, while the specific price benchmarks are updated periodically through Ministry of Trade decrees.

Classification of Wood Products for Export Duty

The application of Wood Export Duty is highly dependent on the Harmonized System (HS) code classification of the timber product. Not all wood products are treated equally; the duty varies significantly based on the level of processing and the origin of the timber. Under the current regulatory framework, the government categorizes wood into several distinct groups, including veneer, wood chips, and various forms of processed wood.

Exporters must be diligent in identifying the correct tariff post for their products. For instance, veneer products are typically classified under ex 4408.10.10 through ex 4408.90.90. Meanwhile, wood in the form of chips or particles falls under 4401.21.00 and related codes, while chipwood is categorized under ex 4404.10.00. Misclassification can lead to significant legal and financial repercussions, as the Export Price—and consequently the total duty—is tied directly to these tariff headings.

The classification also considers the physical state of the wood. Whether the wood is raw, semi-processed, or fully finished determines its status under the law. The goal of the Processed Wood Regulations is to ensure that wood leaving Indonesia has undergone sufficient value-added processing, which is why raw timber often faces higher barriers or specific price benchmarks compared to highly finished goods.

Export Prices for Veneer: Natural Forest vs Plantation

Veneer is one of the primary timber products subject to specific price determinations. According to the guidelines, veneer is defined as thin sheets of wood obtained by peeling or slicing round wood or sawn timber with a thickness not exceeding 6 mm. The Veneer Export Price is bifurcated based on the source of the timber: natural forests (hutan alam) and plantation forests (hutan tanaman).

Based on Keputusan Menteri Perdagangan Nomor 560 Tahun 2026, the following prices are established as the basis for Export Duty calculation:

• Veneer from Natural Forests: US$ 755 per Cubic Meter (M3).
• Veneer from Plantation Forests: US$ 946 per Cubic Meter (M3).

Interestingly, the higher price benchmark for plantation veneer reflects the government’s recognition of the investment required in sustainable forest management. Furthermore, there is a specific sub-category for “Wooden sheets for packaging boxes.” This refers to dry veneer made from Sengon wood that has been smoothed on both wide sides. To qualify for this specific pricing, the dimensions must not exceed a thickness of 5 mm, a width of 300 mm, and a length of 1,250 mm. The Export Price for this specific product is set at US$ 1,101 per M3.

Price Benchmarks for Wood Chips and Particle Wood

Moving further down the processing chain, wood in chips or particles (serpih kayu) and chipwood (kepingan kayu) are also subject to Wood Export Duty. These materials are often used in the pulp and paper industry or for the production of particle boards. Unlike veneer or processed timber, which are measured by volume (M3), these products are measured by weight (Metric Tons).

The price benchmarks as per the latest regulations are as follows:

These benchmarks are critical for exporters to calculate their tax liability before shipping. It is important to note that the Export Price is used as the “value” for the duty calculation formula, regardless of the actual transaction price stated on the invoice, provided the government-set price is higher or as mandated by the valuation rules in Peraturan Pemerintah Nomor 55 Tahun 2008.

Regulations for Processed Wood and Cross-Sectional Area Limits

The most detailed section of the Processed Wood Regulations concerns timber that has been smoothed on all four sides. For wood to be classified in this category, its surface must be flat and smooth. The Export Price for these products is heavily influenced by the species of the wood and the cross-sectional area of the pieces.

Standard Processed Wood (1,000 mm2 to 4,000 mm2)

For most species, the price benchmark applies to wood with a cross-sectional area between 1,000 mm2 and 4,000 mm2. Under Keputusan Menteri Perdagangan Nomor 560 Tahun 2026, the prices are:

• Meranti: US$ 1,346 / M3
• Merbau: US$ 1,047 / M3
• Rimba Campuran (Mixed Tropical Wood): US$ 740 / M3
• Eboni: US$ 2,785 / M3
• Jati (Teak): US$ 3,252 / M3

Plantation Forest Species

Processed wood from plantation forests has its own set of benchmarks, reflecting different market values for various species:

• Pinus and Gmelina: US$ 731 / M3
• Acasia: US$ 652 / M3
• Sengon: US$ 1,350 / M3
• Karet (Rubberwood): US$ 443 / M3
• Balsa, Eucalyptus, etc.: US$ 559 / M3
• Sungkai: US$ 1,298 / M3

Additionally, there is a specific provision for Merbau wood with a larger cross-sectional area (between 4,000 mm2 and 10,000 mm2). If the wood is smoothed on all four sides and falls within these dimensions, the Export Price is set at US$ 1,500 / M3. This granularity in the regulations ensures that high-value timber is taxed appropriately according to its market standing and degree of processing.

Specific Exemptions for Pencil Slats and Joined Wood Products

While the Wood Export Duty covers a wide range of products, the Indonesian government provides specific exemptions to support certain manufacturing niches. These exemptions are strictly defined by dimensions and processing methods to prevent the misuse of the facility.

One of the most notable is the Pencil Slat Exemptions. Pencil Slats (Slat Kayu) are thin wood sheets obtained by processing sawn timber into slats specifically intended as raw materials for pencils. To be exempt from Export Duty, the slats must meet the following criteria:

• Thickness: Not more than 6 mm.
• Width: Not more than 80 mm.
• Length: Not more than 300 mm.

Another significant exemption applies to certain types of joined wood products. Wood that is obtained by joining sawn timber is exempt from Export Duty provided that each individual piece being joined does not exceed a cross-sectional area of 4,000 mm2 and the total length does not exceed 1,000 mm. These exemptions are designed to facilitate the export of semi-finished components that require further assembly or specific industrial use, thereby supporting the global supply chain for finished consumer goods like stationery and furniture.

Conclusion

Navigating the complexities of Wood Export Duty requires a thorough understanding of both the legal basis and the technical specifications of the timber being exported. From the Veneer Export Price distinctions between natural and plantation forests to the rigorous Processed Wood Regulations regarding cross-sectional areas, every detail matters. By staying informed about the latest benchmarks set in Keputusan Menteri Perdagangan Nomor 560 Tahun 2026 and utilizing available Pencil Slat Exemptions, businesses can ensure regulatory compliance while optimizing their export operations. As customs practitioners, we emphasize the importance of precise physical measurement and correct HS code classification to avoid delays and ensure the smooth flow of Indonesian timber products to the global market.