KUCHING: With the imminent announcement of Budget 2024, several requests have been listed out for the federal government to consider in order for the palm oil industry to remain competitive.
Sarawak Oil Palm Plantation Owners Association chairman Eric Kiu Kwon Seng said the wishes included windfall profit levy, machinery import duty and replanting allowances.
“Effective January 2022, the windfall profit levy rate for Sarawak and Sabah has been increased to three per cent to match Peninsular Malaysia.
“The higher rate of windfall profit levy in Sarawak and Sabah has furthered increased the cost of production in these two states, who are already burdened with higher input cost and logistic cost compared to Peninsular Malaysia.
“Therefore, it is imperative for the government to review the current policy on imposing windfall profit levy on palm oil. If not complete abolishment, at least a reduction in the rate and an increase in the threshold,” he stressed in a recent statement.
Kiu added that a special tax break offer for the machinery import duty by the government would be highly beneficial.
“This is because machinery and equipment have never been cheap in Malaysia as most of the farm machinery and equipment are imported and are subject to various import duty, excise duty and sales tax.”
He highlighted that implementing replanting allowance, such as giving tax rebate, would expedite the replanting programme to improve production of palm oil, which in turn, would give higher revenue to the nation.
“In order to maintain sustainable production, plantation companies would usually earmark four to five per cent of the area to be replanted annually when time is due.”
