Palm Oil Windfall Tax Could Earn Govt RM500 Million

The rubber glove and stock markets have been seeing a rise in fortune for the last two months, however many had not noticed our golden crop commodity Palm Oil has also been seeing a resurgence with price hitting the above RM2500 mark.

This bit of encouraging news bodes well for all and sundry including down stream and upstream players, the dejected feeling many of our producers had last year and early this year is wiped away since the rise, putting much profits into their pockets. Not only that if the CPO remains stable at the RM3000 per tonne range, the government will also benefit in terms of windfall profit levy expected to be in the region of RM500 million in 2021.

Malaysian Palm Oil Board (MPOB) chairman Datuk Ahmad Jazlan Yaakub said this is an important contribution of the palm oil industry for the plantation sector to gross domestic product (GDP) as the country grapples with the COVID-19 pandemic.

“Palm oil prices may rise higher as foreign demand continues to rise. This is also because our stock is below 2.0 million tonnes, which is about 1.6 million tonnes.

“The palm oil windfall profit levy imposed on palm oil sales revenue at the current price level will enable the country to collect levy estimated at RM348 million.

Ahmad Jazlan said the windfall profit levy of three per cent is only imposed when the price of palm oil reaches RM2,500 per tonne and above for the Peninsula, and 1.5 per cent for Sabah and Sarawak when the price fetches RM3,000 per tonne and above.

Meanwhile, he asked more part-time independent smallholders to come forward to register for the MSPO certification to make it easier for them to market palm oil overseas. Currently smallholders in the country are estimated at 481,375, with independent smallholders accounting for 248,182, while planted areas under oil palm totalling 959,444 hectares.

More than 30 per cent of smallholders have been certified and many of those who have yet to obtain the certification are independent smallholders. Its vital that these planters get their MSO certificate as its a benchmark to meet international demand as it gives confidence to importing countries that palm oil is safe to use.

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