15/07/2008 (Bernama), Putraya - A total of 3,661 oil palm plantations in the country will be paying a windfall profit levy effective today with the government's decision to exempt smallholders having less than 40 hectares of plantation land, from paying the tax.

Director general of Customs Datuk Seri Abd Rahman Abd Hamid said his department will be sending out notices in three days to all the affected plantations so that they can register according to the Windfall Profit Levy Act 1998.

The levy is to be paid monthly, with the first payment on or before August 14 this year, and the subsequent payments on or before the 14th of the following month, he told reporters here Tuesday.

The government first enforced the levy at the mill level on crude plam oil and crude palm kernel oil on July 1, replacing the cess collected in line with the Cooking Oil Stabilising Scheme.

On July 11, the government announced that all smallholders owning 4O hectares and below of plantation land will be exempted from paying the tax effective July 15.

In line with this, the Cabinet decided that the collection of levy will be done at the plantation level on the production of Fresh Fruit Bunches.

Abd Rahman said the levy imposed will be at three percent of the profit made for every one metric tonne of FFB in plantations in Peninsular Malaysia and at 1.5 percent rate for plantations in Sabah and Sarawak.

The profit will be based on the market price which will be the monthly average national price of crude palm oil as set by the Malaysian Palm Oil Board, minus RM2,000.

Abd Rahman said the previously registered list of plantation owners for the windfall profit levy on crude palm oil and crude palm olein will be cancelled effective Tuesday.

"The registration certificate must be returned and all levies charged as at yesterday must be paid to the nearest Customs office by August 14," he said.

Abd Rahman also called on the plantation owners to not delay their payments as there will be a 10 percent penalty charge on the unpaid amount for 30 days after the due date. The penalty rate will be increased by another 10 percent if there is further delay of payment for the next 30 days and so on until a maximum 50 percent fine is imposed.

He also said that a failure to register and pay the levy or going against the levy laws could result in fines of up to RM20,000 or a jail sentence of up to one year or both for offenders.