14/10/2008 (The Star Online), Sibu - Seven major Sarawak-based oil palm plantation companies are making a second appeal to the Federal Government to waive the windfall tax or revise the threshold price based on present cost increase and crude palm oil (CPO) price level.

In July, the group had made its first appeal to Primary Industries and Commodities Minister Datuk Peter Chin Fah Kui on the proposal.

The planters are Ta Ann Holdings Bhd, Sarawak Plantations Bhd, Rimbunan Sawit Bhd, Sarawak Oil Palm Bhd, WTK Holdings Bhd, Solid Timber Sdn Bhd and Woodman Sdn Bhd, which account for over 50% of the total planted oil palm acreage in Sarawak.

The group’s spokesman Paul Wong told StarBiz that when the CPO price was trading at RM3,000 per tonne, Sarawak planters still managed to make small margins.

“But with CPO trading at RM1,700, we are now bleeding and need the authorities to listen to our plight. It is unfair to saddle us with such heavy taxes.”

Wong said: “On average, local oil palm planters had to fork out up to 46% of their total earnings to pay taxes in the form of Malaysian Palm Oil Board (MPOB) cess, windfall tax to subsidise oil palm refiners as well as other corporate income and Sarawak sales tax.”

He said many quarters failed to realise that most Sarawak players were late entrants to the oil palm sector with only 20% total matured area over nine years old compared with their counterparts in Sabah and Peninsular Malaysia.

“Thus the 80% unmatured oil palm area is unable to cover many Sarawak planters’ cost of production and sales,” he said.

At the threshold price of RM2,000 per tonne of CPO, plantation companies in Sarawak were not making any profit yet, Wong said.

He said players also continued to grapple with the rising costs of fertilisers, chemicals and fuel.

Fertilisers represent over 60% of planters’ operational costs.

On behalf of the grouping, Wong is appealing to the Federal and Sarawak governments to revise the structure of oil palm related taxes for planters.

For the Federal Government, it proposed a waiver on windfall profit levy or revising a new threshold CPO price at RM3,000 per tonne from the current RM2,000; waiver on outstanding amount of MPOB cess, plantation workers’ levy for Sarawak, review on RM40 per tonne discount on CPO price for east Malaysia, discount on MPOB oil cess and subsidy for fertilisers.

It wants the state government to grant working permits to “illegal” foreign workers in the plantations and a reduction in the special sales tax on CPO and palm kernel.

In addition, it is also proposing for a deferment of local council assessment rates on oil palm plantations for the first 10 years.