KUALA LUMPUR – A Malaysian palm oil body has commended the federal government for reviewing the windfall-profit levy-collection mechanism imposed on industry players.
The Malaysian Palm Oil Association’s (MPOA) chief executive, Joseph Tek, hailed Putrajaya after Deputy Finance Minister I Datuk Seri Ahmad Maslan announced a review of the collection mechanism and windfall-profit price threshold in line with the latest production prices.
During the debate on the Windfall Profit Levy (Validation) Act 2023 in Parliament last Monday (April 3), Ahmad said there are currently 3,664 registered oil palm producers paying the windfall-profit levy in Malaysia.
Total collection of the levy since January 1, 1999 has amounted to RM7.6 billion, of which the government has used RM5.86 billion on cooking oil subsidies.
“We commend the government for its efforts in addressing the issue of the windfall profit levy, and we look forward to engaging with them in the upcoming review process,” Tek said.
“We urge the government to consider the rising cost of production when determining the revised price threshold.”
MPOA represents over 40% of the total planted oil palm area in Malaysia. Its members include plantation giants such as Sime Darby Plantation Bhd, FGV Holdings Bhd, Kuala Lumpur Kepong Bhd, and IOI Corporation Bhd.
Tek also urged the government to review the doubling of the levy rate calculation from 1.5% to 3% for Sabah and Sarawak, which was imposed in 2022, considering the State Sales Tax (SST) rates of 5% and 7.5% on crude palm oil (CPO) for Sarawak and Sabah respectively.
He pointed out that the 3% calculation for the windfall profit levy is based on the tonnage of fresh fruit bunches (FFB) production levied against the price threshold of CPO at RM3,000/tonne in Peninsular Malaysia and RM3,500/tonne in the East Malaysian states respectively.
Tek said in contrast, the Sabah and Sarawak SSTs are based on CPO prices on sales volume.
“MPOA looks forward to sustained and inclusive engagements with the government to ensure the long-term competitiveness and sustainability of the palm oil industry in Malaysia,” he added. – The Vibes, April 6, 2023
