THE crude palm oil (CPO) threshold price of RM2,000 per tonne under the windfall profit levy imposed on oil palm plantation companies in July 2008 has been revised to RM2,500 for Peninsular Malaysia and RM3,000 for Sabah and Sarawak under the Government’s mini budget announced yesterday.
Malaysian Estate Owners’ Association president Boon Weng Siew said most of the association members were supportive of the Govern-ment’s decision given the current low CPO price level and high cost of production situation.
“We have requested since September last year for the Government to either revise the CPO threshold price to RM2,500 or abolish the CPO windfall profit levy,” he told StarBiz.
There was also a call from oil palm planters seeking the Government to refund the windfall tax collected between July and September estimated at about RM250mil, following the fall in CPO price below RM2,000 in October.
Boon pointed out that the Government should have also look at the calculation mode of windfall profit levy.
“We believe it will be more reasonable to calculate the levy based on the actual profit of the plantation companies rather than tax them based on fresh fruit bunches or CPO yield,” he added.
Boon said the current calculation was unfair to new plantation companies producing three tonnes per ha per year like those in Sarawak, which started to actively cultivate oil palm about six years ago.
“It is not logical to impose windfall profit tax on these new planters, which are not even paying the ordinary corporate taxes,” he added.
Sarawak-based timber and plantation group Ta Ann Holdings Bhd managing director Datuk Wong Kuo Hea concurred with Boon that it was unfair to impose the windfall tax on new oil palm planters.
“It is good of the Government to respond to Sarawak planters’ plea for a revision in CPO windfall profit tax. However, we would prefer if the CPO windfall tax is abolished because our margins still have not improved while production cost is getting higher,” he said.
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