12/09/2023 (The Borneo Post), Kota Kinabalu - Sabah Palm Oil Planters Association’s Executive Advisor, Datuk Yap Wun Fook, has urged the Sabah government to review the 7.5 per cent palm oil sales tax to ensure that the tax system aligns with fairness principles.

The Keningau Palm Oil Mill Sdn Bhd chairman stressed that the palm oil sales tax imposed by the state government is often passed on to oil palm plantation owners through squeezing the purchase price of palm fruit, ultimately causing oil palm growers to inevitably bear the impact of the 7.5 per cent sales tax.

Yap pointed out that the current policy of the state government imposes a 7.5 per cent sales tax when the crude palm oil price exceeds RM1,000 per metric tonne.

However, this sales tax is calculated based on gross revenue rather than profit, which means that palm oil industry players are also taxed on their capital, Yap said at a palm oil sales tax briefing organized by the state Finance Department held at a hotel in Sandakan recently.

The palm oil sales tax briefing was attended by the state Finance Ministry’s Secretary-General, Datuk Mary Angela, who represented the department’s Permanent Secretary, Datuk Mohamad Sofi Amin.

Invited guests included Andamy Plantation Group chairman cum Sabah Economic Advisory Council member Tan Sri Andrew Liew, chairman of Toupos Palm Oil Mill Sdn Bhd, Tiu Fui Khiong and representative from the Finance ministry, Brenda Majimbun.

According to Yap, the palm oil sales tax collected by the Sabah state government is a significant source of revenue for the state treasury.

“After collecting the relevant taxes, it is essential for the government to improve road infrastructure within the state and pay close attention to the interests of palm oil industry players and smallholders,” he said.

He emphasized that palm oil industry players and smallholders in Sabah are currently facing challenges such as high transportation costs and a shortage of foreign labor, which require the attention and resolution of the state government authorities.

Yap pointed out that many foreign laborers working in palm oil plantations in the state have been living in the country for several years without proper documentation, making it difficult for palm oil industry players to obtain permits for them.

In a situation where foreign labor is scarce, it severely affects palm fruit harvesting, leading to the awkward situation of having fruit but no one to harvest it, resulting in at least a 30 per cent loss of business for palm oil industry players, he claimed.

“I hope that the state government will vigorously promote and encourage the development of organic composting, where palm oil residue is mixed with wastewater and specific enzymes for fermentation to produce organic compost for use in palm oil plantations,” he said.

Yap also expressed hope that Chief Minister, Datuk Seri Panglima Hajiji Noor will sympathize with the situation and review the existing 7.5 per cent palm oil sales tax.

https://www.theborneopost.com/2023/09/12/sabah-govt-urged-to-review-palm-oil-sales-tax/