MARKET DEVELOPMENT
No Rationale For Proposed Tax on Palm Oil
No Rationale For Proposed Tax on Palm Oil
11/03/2016 (The Star) - The Malaysian Palm Oil Council (MPOC) condemns efforts by the governing party of France, the Socialists, to impose a discriminatory tax on palm oil produced in the developing world. A new report commissioned by MPOC finds no economic rationale for the new tax and, in fact, finds it to be disproportionate and discriminatory.
The French Parliament is currently debating a Biodiversity Bill. This week in the French National Assembly, Socialists MPs have proposed a new €90 (RM407) per tonne tax on palm oil. This follows an attempt in January by the French Senate to place a €300 (RM1,356) tax on palm oil.
MPOC wishes to state clearly that any additional tax on palm oil in France has no economic rationale. To those who may claim that a €90 tax is preferable to a €300 tax, the answer is clear: There is no basis for any tax increase and neither proposal should be supported by the French Government. The economic analysis clearly shows any additional tax on palm oil to be discriminatory and unjust.
The proposed tax is based on flimsy grounds that palm oil is undertaxed in France. This is false.
The Assemblée Nationale has also proposed a “differential” tax which would discriminate between different palm oil producers based on unspecified, unworkable, and discriminatory views of sustainability. This action clearly undermines the national development goals of developing countries. The differential tax proposal is a clear violation of both WTO and EU rules.
Malaysia is a good friend of France, and French Foreign Minister Jean-Marc Ayrault promised the people of Malaysia that he would not tax palm oil. Ayrault promised the 300,000 small farmers in Malaysia that France would not harm them with a new tax. We expect this promise to be kept.
MPOC urges the French Government to reject these discriminatory and unjust tax proposals, which will harm jobs, poverty alleviation efforts and economic growth in both France and Malaysia.
Prof Pierre Garello from Université Aix-Marseille issued a statement on this matter: “The economic analysis clearly shows that the premise for increasing taxes on palm oil is economically unsound. The claim that palm oil is ‘undertaxed’ in France is factually and materially wrong. Senators and MPs are using incorrect economic measurements to justify new taxes, which is misleading and makes for terrible laws.”
A new economic analysis conducted by Prof Garello shows the following facts about palm oil taxation in France:
> Palm oil is currently already overtaxed in France, compared to other vegetable oils.
> The current tax levels for vegetable oils in France are: olive oil (4.9% tax), rapeseed oil (11.69%), sunflower oil (15.79%), palm oil (21.67%), soybean oil (23.64%).
> The additional tax on palm oil would raise this tax discrimination to extraordinary levels. The levels proposed by the Senators raises tax on palm oil to 209.7%, while tax on other vegetable oils remain the same.
The facts are clear. Claims from the senators and MPs that palm oil is undertaxed are untrue. There is no economic justification for this proposed tax.
TAN SRI DR YUSOF BASIRON
Chief Executive Officer
Malaysian Palm Oil Council
The French Parliament is currently debating a Biodiversity Bill. This week in the French National Assembly, Socialists MPs have proposed a new €90 (RM407) per tonne tax on palm oil. This follows an attempt in January by the French Senate to place a €300 (RM1,356) tax on palm oil.
MPOC wishes to state clearly that any additional tax on palm oil in France has no economic rationale. To those who may claim that a €90 tax is preferable to a €300 tax, the answer is clear: There is no basis for any tax increase and neither proposal should be supported by the French Government. The economic analysis clearly shows any additional tax on palm oil to be discriminatory and unjust.
The proposed tax is based on flimsy grounds that palm oil is undertaxed in France. This is false.
The Assemblée Nationale has also proposed a “differential” tax which would discriminate between different palm oil producers based on unspecified, unworkable, and discriminatory views of sustainability. This action clearly undermines the national development goals of developing countries. The differential tax proposal is a clear violation of both WTO and EU rules.
Malaysia is a good friend of France, and French Foreign Minister Jean-Marc Ayrault promised the people of Malaysia that he would not tax palm oil. Ayrault promised the 300,000 small farmers in Malaysia that France would not harm them with a new tax. We expect this promise to be kept.
MPOC urges the French Government to reject these discriminatory and unjust tax proposals, which will harm jobs, poverty alleviation efforts and economic growth in both France and Malaysia.
Prof Pierre Garello from Université Aix-Marseille issued a statement on this matter: “The economic analysis clearly shows that the premise for increasing taxes on palm oil is economically unsound. The claim that palm oil is ‘undertaxed’ in France is factually and materially wrong. Senators and MPs are using incorrect economic measurements to justify new taxes, which is misleading and makes for terrible laws.”
A new economic analysis conducted by Prof Garello shows the following facts about palm oil taxation in France:
> Palm oil is currently already overtaxed in France, compared to other vegetable oils.
> The current tax levels for vegetable oils in France are: olive oil (4.9% tax), rapeseed oil (11.69%), sunflower oil (15.79%), palm oil (21.67%), soybean oil (23.64%).
> The additional tax on palm oil would raise this tax discrimination to extraordinary levels. The levels proposed by the Senators raises tax on palm oil to 209.7%, while tax on other vegetable oils remain the same.
The facts are clear. Claims from the senators and MPs that palm oil is undertaxed are untrue. There is no economic justification for this proposed tax.
TAN SRI DR YUSOF BASIRON
Chief Executive Officer
Malaysian Palm Oil Council