Association seeks review of windfall profit levy, higher threshold for Sarawak palm oil sector
09/07/2026 (The Borneo Post), Kuching - The Sarawak Oil Palm Plantation Owners Association (Soppoa) has proposed that the Windfall Profit Levy (WPL) be reviewed.
A Soppoa delegation led by chairman Datu Joseph Blandoi presented proposals to federal Deputy Minister for Plantation and Commodities Dato Sri Huang Tiong Sii at his office in Parliament Building on July 2.
In a statement, Soppoa said aside from the review of the WPL, it also proposed the threshold be raised to RM4,000 per tonne of crude palm oil and levy rate restored to 1.5 per cent, taking into account Sarawak’s higher production and logistic costs as well as State Sales Tax.
At the same time, it is seeking permanent representation for Sarawak on the Malaysian Palm Oil Board (MPOB), Malaysian Palm Oil Council (MPOC) and Malaysian Sustainable Palm Oil (MSPO) as the state’s contribution to the national palm oil industry should be reflected in federal policy-making.
“Soppoa also calls for a long-term approval mechanism for the combustion of empty fruit bunches to produce organic fertiliser, replacing the current annual approval process which creates operational uncertainty.
“The federal government must also exempt palm oil by-products, including Palm Kernel Fatty Acid Distillate (PKFAD), Palm Fatty Acid Distillate (PFAD), Palm Kernel Shell (PKS) and EFB, from the expanded Sales and Service Tax (SST), as these materials are essential inputs for downstream processing, biomass utilisation and the circular economy,” it said.
In addition, Soppoa proposed a more practical implementation framework for methane gas capture requirements when palm oil mills seek to utilise existing installed processing capacity, allowing operators sufficient time to recover investments in environmental infrastructure.
Despite the industry’s strong performance, the association said plantation operators continue to face mounting challenges, including labour shortages, rising costs for fertilisers, agrochemicals, machinery, fuel and logistics, as well as increasing compliance obligations.
“About 80 per cent of plantation field workers are foreign workers, while labour and fertiliser account for between 60 and 80 per cent of plantation operating costs.
“The industry is also grappling with pests and diseases, including bunch moths, rats, termites and Ganoderma, in addition to complying with more than 60 international standards and regulatory requirements,” it said.
Soppoa also highlighted Sarawak’s growing contribution to the national palm oil industry, with the state producing 4.49 million tonnes of crude palm oil in 2025, up 7.47 per cent from the previous year and accounting for 22.2 per cent of Malaysia’s total CPO output.
Palm oil exports reached RM18.7 billion, an increase of 16.6 per cent, while the industry generated RM801 million in State Sales Tax revenue — up 12.75 per cent.
According to Soppoa, its members collectively manage about 60 per cent of Sarawak’s 1.67 million hectares of planted oil palm and operate around 80 per cent of the state’s 86 palm oil mills, covering both upstream and downstream activities.
The association said Huang welcomed the issues raised and directed ministry officials to follow up on the matters discussed.
Soppoa reaffirmed its commitment to working with the ministry and relevant agencies to enhance the competitiveness and sustainability of Malaysia’s palm oil industry while ensuring Sarawak’s unique operating environment is recognised, it stressed.
The delegation included Soppoa chief executive officer Dr Felix Moh, first vice chairman Simon Wong, treasurer Daniel Ding, and council members Eric Kiu and Jeffery Ngieng.