10/05/2011 (The Star) - Many are aware that the targeted gross national income for the oil palm sector at RM187bil by 2020 from the current RM60bil is considered a tall order by industry practitioners.

Even if achievable some of it would be from value-added downstream products such as oleochemical derivatives, food and health products and second-generation biofuels.

This point was made by vice chairman of the Malaysian Palm Oil Association Boon Weng Siew at the association's AGM recently.

The total investment required to achieve the target is estimated at RM124bil, whereby the bulk of about 95% will come from the private sector.

However, it is ironic that while the Economic Transformation Pro-gramme (ETP) for palm oil relies on the private sector to fund and drive the Government's vision, it is also the “same” Government that keeps on taxing the industry.

The oil palm sector claims that most sectors of the economy are paying just 26% corporate tax but the total tax paid by the plantation industry had exceeded 46%, which is 20% more than the other sectors.

The plantation sector today can be considered as one of the most heavily-taxed industries in the country with a long list of taxes, cess, levy and export duty!

For example, the palm oil windfall profit tax (WPT), which is triggered by price and based on production, not only reduces the reinvestment surplus but new planting and replanting areas which have yet to generate any profits are also taxed.

Why are plantation owners singled out to pay for WPT whereas petroleum, financial, gaming and independent power producers which also enjoyed lucrative profits are spared the burden?

Some players opined that for the palm oil sector to successfully assist the Government's ETP on oil palm, the Government will need to review many of the long list of taxes being slapped on them, starting with the WPT and even the cooking oil subsidy scheme (COSS).

The COSS from May 2007 to April 2011 had amounted to RM3.6bil, of which 60% came from the plantation sector's cess payment and 40% from WPT.

The plantation sector claims that the COSS, which was meant for the targeted domestic household consumers group, was however badly abused by profiteers such as restaurant owners, small industries and also rampant smuggling of the cheaper “subsidised” cooking oil into neighbouring countries.

While the oil palm sector is all for helping the targeted group, it is totally unfair to ask the sector to also support the non-deserving targeted groups.

Therefore, it is fair to say that the oil palm industry wants a thorough review on its existing taxes from the Government to ensure a more “equitable” spread of taxation to other comparable sectors which are currently enjoying lucrative profits.