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Either abolish the windfall profit levy on palm oil production or raise the threshold to make it worthwhile, the Plantation and Commodities Ministry has told the government.
Its Minister Datuk Seri Johari Abdul Ghani said he had proposed to the Finance Ministry last week to revise the windfall profit levy (WPL) on palm oil to keep the industry competitive with other producing countries.
He said the ministry had two suggestions: to abolish or raise the threshold of the windfall profit levy on palm oil.
He said industry players and the Malaysian Palm Oil Board (MPOB) have raised concerns over the levy, saying increased costs have made it unfeasible.
“Today, it costs around RM2,800 to RM3,000 to produce one ton of palm oil, and the windfall tax kicks in at RM3,500. With costs already nearing this threshold, the windfall margin is virtually non-existent,” he told reporters after the Malaysian Palm Industry Awards Ceremony (AISM) 2023/2024 on Monday (Sept 23).
Currently, a WPL rate of three per cent is imposed on palm oil prices exceeding RM3,000 per ton in Peninsular Malaysia and RM3,500 per ton in Sabah and Sarawak.
He said he also urged the Finance Ministry to reconsider the current tax framework and awaited their response and decision on the matter.
The performance of the palm oil industry in the first half of 2024, crude palm oil (CPO) production rose to 8.9 million metric tons, compared to 8.1 million tons in the same period last year.
Palm oil and palm-based product exports also increased by 32 per cent during this period, rising from 12.2 million metric tons to 16.1 million tons.
MPOB chairman Datuk Mohamad Helmy Othman Basha has called on industry stakeholders to adhere to regulations and standards to establish Malaysia’s palm oil as a global benchmark.
Looking ahead, Mohamad Helmy noted that 2025 will mark the 25th anniversary of MPOB, which has been instrumental in driving technological innovation and regulatory advancements in the palm oil industry.
He reiterated MPOB's commitment to national initiatives, including MSPO Certification, government support for smallholders, and the Agri-commodity Policy 2020-2030, to ensure the sustainable and progressive development of Malaysia’s palm oil sector.
Source: www.thestar.com.my