KUCHING: Plantation Industries and Commodities Minister Datuk Peter Chin welcomed the news that oil palm smallholders with plantations of 40ha and below would be exempted from paying windfall profit levy, saying an estimated 400,000 smallholders throughout the country would benefit from the exemption.
"This is good news for smallholders because they say their costs have increased. (The cost of) their fertiliser, insecticide and pesticide has increased and their labour costs have also increased,” he said.
Chin was responding to Second Finance Minister Tan Sri Nor Mohamed Yakcop’s announcement on Friday.
Chin said the Cabinet decided to grant the exemption in response to appeals by oil palm smallholders, many of whom had written to his ministry or to the Finance Ministry on the matter.
Chin was speaking to reporters Saturday after attending a Sarawak United People's Party (SUPP) central working committee meeting here.
He said, however, that bigger companies with more than 40ha of oil palm land would have to pay the windfall tax as they had the volume and could make a profit.
He also said the windfall tax would be imposed when the price of crude palm oil (CPO) rose above RM2,000 per tonne.
He said the tax rate was 7.5% for companies in Sabah and Sarawak and 15% in Peninsular Malaysia.
"For example, if the price of CPO is RM3,500 per tonne, the excess of RM1,500 above RM2,000 would be taxed at 7.5% for Sabah and Sarawak and 15% in Peninsular Malaysia," he explained.
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