Government looking into palm oil cess, taxes and levies


KUCHING: Primary Industries Minister Teresa Kok says her ministry is reviewing the numerous palm oil cess, taxes and levies being faced by industry players to ensure that the industry stays relevant and competitive.

This is in response to a previous The Borneo Post article highlighting Sabah and ’s palm oil players costly plight, calling on the government to reduce the numerous taxes and levies imposed.

“The government acknowledges the important contribution of the palm oil industry towards the economic and social development of the country. We are fully aware of the issues raised by the industry especially on the taxes and levies imposed on the industry,” Kok said in a written reply to The Borneo Post.

“My ministry is currently reviewing this matter to ensure the Malaysian palm oil industry will be able to remain relevant and competitive. This is to provide a win-win situation to all parties to ensure that our industry is not overly burdened.”

Among the numerous taxes faced by palm oil players include the Malaysian Palm Oil Board (MPOB) cess of RM11 per metric tonne (pmt) for crude palm oil (CPO) and crude palm kernel oil (CPKO), MPOB price stabilisation tax of RM2 pmt for CPO and CPKO, a windfall profit levy of 7.5 per cent when CPO prices exceed RM3,000 in Sabah and Sarawak, and not to mention corporate income tax.

This does not include other additional costs that Sabah and Sarawak players face, such as freight costs as well as taxes to the state governments.

When asked if the government will introduce any initiatives in Budget 2019 to spur the palm oil industry, Kok was optimistic of measures to reduce the burden of the industry.

“One of the main focus of the government is to ensure sustainable development of the palm oil industry in line with the Sustainable Development Goals. Therefore, for Budget 2019, I am optimistic that measures will be announced to reduce the burden of the industry so as to remain relevant and competitive,” she added.

Touching on the Malaysian Sustainable Palm Oil (MSPO) certification, the minister underscored the government’s commitment to implement the mandatory MSPO certification by December 31, 2019 towards producing sustainable palm oil.

“We are currently working hard towards achieving the goal by engaging with all the stakeholders including state government agencies, NGOs as well as smallholders to give them awareness on the importance of MSPO and also to guide them on how to get the MSPO certification,” she said.

“It is not an easy task but we are determined to do so. The ministry is also giving specific attention to the States of Sabah and Sarawak considering that the vast area of plantations are from these two states.

“A Joint Committee with Sabah State Government has been formed to facilitate the implementation of MSPO in Sabah. Similar form of Committee with Sarawak State Government also exists to resolve issues pertaining to the implementation of the MSPO.

will ensure that from the beginning of 2020, all of our palm to the global markets are from a sustainable source which is in line with the stand made by the Prime Minister during the United Nations General Assembly (UNGA) on 29 September 2018.”

As of September 2018, about 1,205,517.72 hectares of oil palm planted areas and 111 palm oil mills have been MSPO certified.

“With the cooperation of all stakeholders, we are very optimistic that we are able to achieve the target,” Kok concluded.

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