13/12/2007 (Daily Express), Kota Kinabalu - The Federal government should consider revising the rate of the oil palm fruit cess in Sabah as it is unfair for the industry, said Tawau MP Shim Paw Fatt.

He said it was unfair for the palm oil industry to bear a disproportionately high subsidy for cooking oil prices when the population of consumers in Sabah is much smaller than the rest of the country, which have a proportionately smaller palm oil production per capita.

"The population of Sabah is estimated to be 10 per cent of the nation's total whereas its palm oil production is about 50 per cent of the total production nationwide," he said in a statement here Wednesday.

On top of that, the Sabah government has for many years past been collecting oil palm fruit sales tax at the rate of 7.5 per cent of the crude palm oil (CPO), a rate which is much higher than the Federal cess.

"I make this call in view of the answer given to me by the Minister of Plantation, Industries and Commodities to my question in Parliament on Dec 10 that the government does not at the present moment propose to exempt producers of oil palm, including those in Sabah, from the payment of the Federal cess," he said.

The Minister said the purpose of the collection of cess is to maintain activities such as research, development and promotion, including that of the Cooking Oil Stabilisation Scheme (COSS).

Shim said the collection of the Sales Tax by the State government and the cess by the Federal government had been seen as double taxation.

According to the present CPO prices, plantations whose holdings exceed 100 acres have to pay appropriately RM29 on each metric tonne of Fresh Fruit Bunch on account of the Federal cess and RM45 under the Sabah Sales Tax.

On top of that, he said oil millers also charged RM20 for freight charges, which means palm oil producers in Sabah were getting RM65 less than their counterparts in Peninsular Malaysia.

The main purpose of the collection of the Federal cess is to subsidise manufacturers and packagers of cooking oil in order to maintain the price at a level affordable by consumers.

"The Federal government should revise its present rate, specially applicable to Sabah, so that its palm oil producers are not overly burdened on top of the Sales Tax they are now paying," he said.