KUALA LUMPUR – It was bittersweet news for palm oil industry players in Sabah and Sarawak after the Budget 2022 tabling yesterday, in which an increase in the palm oil windfall profit levy threshold was announced, but also an increase in the levy tax rate.
Malaysian Palm Oil Association (MPOA) chief executive officer Datuk Mohd Nageeb Wahab said that, while the association welcomes the gesture from the government that had listened to its request to increase the windfall profit levy threshold for both East and West Malaysia, it is unfair to raise the levy rate for East Malaysia.
“We hope the government will keep the tax rate for East Malaysia at the status quo as the increase in threshold is not being compensated by the increase in the tax rate,” he told The Vibes.
Yesterday, Finance Minister Datuk Seri Tengku Zafrul Tengku Abdul Aziz, when tabling the budget, said the government has agreed to increase the windfall profit levy for crude palm oil (CPO) from RM2,500 to RM3,000 per tonne for West Malaysia, and from RM3,000 to RM3,500 per tonne for Sabah and Sarawak.
However, Tengku Zafrul also announced that the levy rate for Sabah and Sarawak will be adjusted to be the same with West Malaysia, at 3%, an increase from the current rate in East Malaysia that stands at 1.5%.
According to the Malaysian Palm Oil Council’s website, the CPO price is at RM4,929 per tonne as of Thursday.
Since the end of the last year, MPOA has been vocal about the various taxes imposed on the palm oil industry, especially for Sabah and Sarawak.
On top of the windfall profit levy, Sabah’s palm oil players were also imposed with 7.5% sales tax on CPO, and 5% sales tax in Sarawak on CPO and crude palm kernel oil.
The association has described the palm oil sector as the most heavily taxed in the country, other than the “sin sectors” of gaming, tobacco and alcohol, and appealed to the government to suspend or abolish the taxes. – The Vibes, October 29, 2021
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