KUALA LUMPUR, Nov 22 2019 : The windfall tax imposed on palm oil exporters should be suspended indefinitely even when crude palm oil (CPO) prices have surpassed RM2,500 per tonne, the Malaysia Palm Oil Association (MPOA) said.
“If ever the windfall profit tax is to be retained, the threshold should be increased from RM2,500 to RM3,000 per tonne for Peninsular Malaysia and from RM3,000 to RM3,500 per tonne for Sabah and Sarawak and the proceeds should be channelled back to the industry,” MPOA chief executive Datuk Nageeb Wahab said.
He said this is to give a breathing space to smallholders, as the industry as a whole is just about to recover from the prolonged low palm oil prices and has suffered in terms of low profits and even losses over a period of time.
To offset this, Nageeb said most of the smallholders have resorted to cutting fertiliser applications notwithstanding the ever increasing cost of production.
He said coupled with that, the dry spell experienced earlier this year is going to have an effect on yields in 2020.
“Smallholders are basically the group that has suffered the most and shall not be enjoying the better prices as a result,” he explained.
Yesterday, the Ministry of Primary Industries announced its proposal that 50 per cent of the windfall profit tax collected by the government to be chanelled back to the industry for various purposes, namely as subsidy to fund the B20 biofuel mandate, which is set for implementation in late 2020.
The ministry also announced the imposition of an additional RM1 per tonne CPO produced as “Reforestration Cess” effective Jan 1, 2020, as well as the continued CPO export duty exemption next year to keep the commodity prices competitive. – Bernama