15/09/2012 (The Sun Daily) - PKR today challenged the Plantation, Industries and Commodities Ministry to publish the list of those given approved permits (AP) to export crude palm oil (CPO) to overseas refineries tax-free.

The party's Trade and Investment Bureau chairman Wong Chen said there were strong indications of abuse in the system as the AP list is allegedly a state secret.

"During a recent palm oil forum held in Kuala Lumpur, a palm oil analyst had asked for the list of AP holders to be named, but the panel said the list comes under the Official Secrets Act.

"This is highly suspicious and even more so in the midst of a crisis in the industry where Malaysian refineries are now working at a 60% capacity," he said at a press conference today.

Local palm oil companies who don't hold APs have to pay 23% tax if they export CPO directly overseas, but those holding the permits can export CPO to their overseas refineries tax-free.

The local palm oil industry has also been facing a crisis stemming from Indonesia's new tax incentives, which resulted in Indonesian refineries taking over a sizeable market share of processed palm oil from Malaysian refineries.

Wong pointed out that the government's solution to the crisis – increasing the tax-free CPO quota by 2 million metric tonnes to 5.6 million metric tonnes – meant a potential loss of RM4 billion in duty revenue for 2012.

"By increasing the quota, the government has effectively bypassed the local refineries to support overseas refineries by allowing more CPO to exit the country.

"Now that we have learnt that the list of AP holders is an official secret, there is a good indicator that the government has something to hide, and may be using this crisis as an opportunity to enrich some people who are mere traders and not producers," he claimed.

Wong said with proper governance, the palm oil industry could see RM2 billion of duty revenue realised annually.

"This amount is sufficient to fund half of Pakatan's free higher education policy to replace PTPTN," he said.

The APs were first introduced in 2000 to support local companies that had overseas facilities, but Wong questioned whether such permits were still necessary.

"Many of these companies are now multi-billion dollar corporations, so we need to ask whether they still need this 23% tax exemption.

"It is imperative to make good policy decisions that help the country," he said.

Wong said the matter would be brought up during the next parliamentary sitting.