Re-appeal for windfall tax abolishment

PUTRAJAYA: The Plantation Industries and Commodities Ministry will re-appeal to the Finance Ministry on behalf of oil palm planters to consider abolishing the windfall tax introduced in July 2008 if crude palm oil (CPO) prices climb back to above RM2,000 per tonne.

However, it will not be able to ask the Government to refund the windfall tax collected from July to September last year as requested by oil palm planters following the sharp fall in CPO prices to RM1,800 per tonne currently.

Minister Peter Chin Fah Kui said: “I don’t think planters can seek a refund from the windfall tax but a fairer request will be for the Finance Ministry to revoke the windfall tax.”

Planters are required to pay windfall tax based on a CPO threshold price at RM2,000 per tonne and above.

They stopped paying the tax since last October when CPO traded in the RM1,800 to RM1,850 per tonne range.

Speaking after chairing a meeting between Universiti Pertanian Malaysia and his ministry for bilateral cooperation in research and development, technical know-how, seminars and training activities, Chin also said his ministry was eyeing more barter trade in terms of swapping palm olein (cooking oil) with fertiliser components from the world’s major producing countries.

“We will be looking at Syria, Iran, Jordan, Morocco, Cambodia and Vietnam to barter palm olein for potash and potassium, the main raw ingredients for fertiliser,” he added.

The ministry had last month approved about US$20mil worth of such transactions with North Korea.

Such deals are allowed to be undertaken through the Palm Oil Credit and Payment Arrangement set up in 1992 with the support of Bank Negara.

Currently, Malaysia imports most of its fertiliser components from Russia and Canada.

Of the country’s total annual fertiliser consumption of 4.2 million tonnes, oil palm plantation companies take up 2.23 million tonnes, government bodies like Felda, Felcra, Salcra and Risda about 1.07 million tonnes, organisations like National Farmers Organisation (the body responsible for the distribution of subsidised fertiliser) about 270,000 tonnes and smallholders 630,000 tonnes.

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