East Timor removes tax on coffee exports

JAKARTA, July 25 (Reuters) - The United Nations administration in East Timor said on Wednesday it had axed the export tax on coffee, one of the impoverished territory's main export earners.

Coffee exports of more than five kilograms had been taxed at five percent.

"This is an important step in alleviating some of the economic difficulties faced by coffee farmers in East Timor," U.N. administration chief Sergio Vieira de Mello said in a statement.

East Timor, racked by more than two decades of conflict, is a minor coffee producer by world standards but enjoys a niche market for its high value mild-washed arabica, which accounts for 85 percent of the territory's total output.

East Timor produces about 10,000 tonnes of coffee a year.

Coffee is East Timor's main export earner, bringing in an estimated $20 million a year, and will remain its biggest source of income until oil and gas production begins in the Timor Gap.

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