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KUALA LUMPUR: The Malaysian Property Owners Association (MEOA) is calling for various taxes on the oil palm industry to be suspended or removed, calling them “unfair”.
The taxes you refer to are the extraordinary income tax (WPL) on crude palm oil (CPO), the 7.5% sales tax in Sabah on CPO sales and the sales tax. five percent in Sarawak on CPO and crude palm kernel oil (CPKO) sales.
In a statement today, MEOA described the palm oil sector as the most taxed in the country, apart from the “sin sectors” of games, tobacco and alcohol.
Together, they (the oil palm industry taxes) amounted to an estimated RM1.3 billion in 2019 when crude palm oil prices were low, averaging RM2.079 per ton. .
“Based on the 2019 production figures and assuming the CPO price remains at RM3,200 per tonne, MEOA expects these taxes to skyrocket to RM2.8 billion a year,” he said.
Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz, in an interview with Bernama last week, said that imposing a windfall tax on glove makers would make investors think twice about investing in the glove. country.
Referring to his comment, MEOA said: “Therefore, we ask whether the finance minister will broaden this political thinking to also exempt the palm oil industry from this tax.
“It should be noted that no oil palm planter will rejoice incessantly at current palm oil prices, given the cumulative effect of relentless cost increases over the years.”
Yesterday, the Chairman of the Malaysian Palm Oil Board (MPOB), Datuk Ahmad Jazlan Yaakub, said that WPL collections could be approximately RM500 million in 2021 if the CPO price was between RM3. , 000 and RM3,500 per ton.
“In other words, WPL collections from the palm oil sector next year could exceed the RM400 million that various glove manufacturers donated to the government’s Covid-19 Fund,” he said.
Meanwhile, MEOA urged the Sarawak state government to review CPO and CPKO sales taxes with the aim of reducing or abolishing them.
“These taxes, on income rather than profit, are a heavy burden on the sustainability of oil palm operations, especially when crude palm oil prices are low, and for Sarawak planters, many of the which started late against Peninsular Malaysia or Sabah planters in oil palm cultivation, ”he said.
As for Sabah, the association asked the state government to consider reducing or eliminating the 7.5 percent crude palm oil sales tax, which amounted to an estimated RM791 million, the year past.
Because the tax was applied to income rather than earnings, MEOA calculated that this equaled a whopping 44 percent of economic earnings in 2019 when CPO prices were low.
MEOA said that over the years, the oil palm sector had transformed Malaysia into a driving force in the global edible oil market, while nurturing the national economy and remaining an indispensable economic pillar in the socio-political landscape. , especially to generate development and well-being. in rural areas.
“The industry has remained strong, providing and sustaining employment opportunities, creating many multiplier and derivative benefits and generating significant foreign exchange for the country.
“All of these aspects must be maintained to allow for a win-win proposition for all relevant stakeholders,” he added. -Called
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