15/04/2010 (Free Malaysia Today), Kota Kinabalu - The Malaysian Palm Oil Board (MPOB) has been asked to account for how it has spent close to half-a-billion ringgit in tax collected from Sabah planters over the past five years.

Tawau MP Chua Soon Bui said a detailed account would help establish whether there was any wastage as well as determine how it had been used.

She said that she was given to understand that a total of RM443.91 million had been paid in palm oil cess between 2005 and 2009, including RM49.48 million collected from Tawau.

MPOB says the cess helps pay for research and development activities, and the promotion of Stabilisation Fund for Palm Oil Price.

Chua says a detailed audited account of how exactly the amount collected was spent would clarify if it was used for its intended purposes as stated by the board.

She made the request in Parliament when responding to Primary Industries and Commodities Minister Bernard Dompok’s disclosure of the total cess collected from Sabah over the last five years from 2005 to 2009.

Chua also wanted to know if the government planned to provide incentives to the oil palm industry in the state, which is hampered by poor infrastructure.

In his reply, Dompok explained that there were three types of taxes collected from the industry:
- Cess collected by MPOB at RM13 per tonne of CPO (crude palm oil) produced by the refineries, which is used to pay for research and development activities, and the promotion of Stabilisation Fund for Palm Oil Price
- Levy on extraordinary profit when the CPO price exceeds RM2,500 per tonne in Peninsular Malaysia and a 15 percent levy if it exceeds RM3,000 per tonne in Sabah and Sarawak, with 7.5 percent of this levy collected by the Malaysian Royal Customs Department.
- Sales tax on CPO in Sabah at 7.5% and in Sarawak at 2.5% if CPO is priced between RM1,000 and RM1,499 and five percent when the price exceeds RM1,500. This tax is collected by the state government from the palm oil refineries.
- Dompok acknowledged that the industry in Sabah was facing a host of problems, including an unsatisfactory road system and unreliable water and electricity supply.

“In the rainy season, crude palm oil cannot be transported out since lorries cannot enter or get out from the factory. This means the crude palm oil cannot be sent to the filtering factory in time.

Infrastructural problems
Disruptions of water and electric supplies jeopardise processing and manufacturing activities of palm oil,” he said.

To resolve these issues, the government is studying a proposal to upgrade the road system in interior areas of Sabah under the 10th Malaysia Plan.

The aim is to facilitate the delivery of crude palm oil to the factories so that palm oil-based products may be manufactured without any trouble, he said.

He added that the incentives provided by the government include RM1,000 and RM6,000 per hectare for cutting down and replanting palm trees over 25 years old.

Ministry figures show that as of March this year, a total of 8,613 applications involving the replanting of 23,662 hectares had been approved for the whole country.

Of this, 2,474 applicants with areas of 52,556ha had received financial aid totalling RM52,556 million for the whole country.

In Sabah, 37 estates and 88 private smallholders covering a total of 7,909,872ha had received financial aid of RM7.9 million.

Dompok said the provision of RM6,000 per hectare for replanting falls under the Second Economic Stimulus Package and is only open to private smallholders.

Up to March this year, 6,774 applications involving 24,827ha had been approved under the stimulus package for the whole country.

Of this, 1,824 private smallholders with 8,829ha had been paid RM49,886 million.

In Sabah, 78 private smallholders with 232ha had been paid or been approved for payment totalling RM1.4 million.

Chua urged the government to take into account the infrastructural problems faced by smallholders whose lands fall outside the scope of the Public Works Department so that nobody is left out under the 10th Malaysia Plan.

She suggested that the government set up a registry to allow those who are affected to seek financial aid for road upgrading and repairs.

Chua also noted that the palm oil industry had been asking the MPOB to make available high-yielding oil palm seedlings for planters so that they could increase their yield per hectare.

“MPOB is obligated to do this as the cess collected by MPOB is meant for this purpose,” she said.