Consider rising cost of CPO production when reviewing windfall profit levy: MPOA
04.04.2023 (The Star) - KUALA LUMPUR: The Malaysian Palm Oil Association (MPOA) has urged the government to take into consideration the rising cost of production of crude palm oil (CPO) when determining the revised price of the windfall profit levy.
Chief executive Joseph Tek said the association also requested that the government review the doubling of the levy rate calculation to three per cent from 1.5 per cent for Sabah and Sarawak, which was imposed in 2022, considering (that there is) the State Sales Taxes (SST) of five per cent and 7.5 per cent on CPO for both states.
"We commend the government for its efforts in addressing the issue of the windfall profit levy, and we look forward to engaging with them in the upcoming review process,” he said in a statement.
Yesterday, Deputy Finance Minister I Datuk Seri Ahmad Maslan said the government will improve the levy collection mechanism and is prepared to review the windfall profit threshold by taking into consideration palm oil production cost.
During a winding up of the debate on the Finance Bill in the Dewan Rakyat on April 3, he said the Windfall Profit Levy Act 1998 was enacted to provide for the imposition of a levy on any item as prescribed by the Finance Ministry.
Ahmad added that the windfall profit levy had been collected by the government on crude palm oil, crude palm kernel oil, oil palm fruit and electricity since Jan 1, 1999.
Meanwhile, MPOA said that it is important to note that the calculation for the windfall profit levy of three per cent is based on the tonnage of fresh fruit bunches (FFB) production levied against the price threshold of CPO when it is above RM3,000 per metric tonne in Peninsular Malaysia and RM3,500 per metric tonne in East Malaysian states.
In contrast, Sabah and Sarawak’s SST is based on CPO prices on sales volume.
MPOA looks forward to sustained and inclusive engagements with the government to ensure the long-term competitiveness and sustainability of the palm oil industry in Malaysia. - Bernama