Teresa Kok – Bernama file photo
KUALA LUMPUR: The Ministry of Primary Industries (MPI) is optimistic that the Finance Ministry will approve its proposal for the three per cent windfall tax imposed on palm oil planters to be channelled back to the industry.
Minister Teresa Kok said she expects her 2020 wish to be granted by the MOF and has listed down several things that she needs to do next year to help stabilise crude palm oil prices, which is currently trading at almost RM2,900 per tonne against RM1,700 per tonne in December last year.
“We have a lot of things that we need to do to improve the industry but until I get the black and white (from the MOF) I can’t do anything,” she told reporters after a closed-door media briefing session on the palm oil industry at Wisma Bernama today.
The windfall tax is a tax levied by the government on some industries which have experienced above-average profits, which is currently applicable to the palm oil industry as palm oil prices in the physical market have surpassed RM2,500 per tonne.
Hence, effective Jan 1, 2020, a three per cent windfall tax per tonne will be imposed on planters in the peninsula while for planters in Sabah and Sarawak, a 1.5 per cent windfall tax will be imposed if the price exceeds RM3,000 per tonne.
She said the tax would be used for the biodiesel stabilisation fund and campaigns to help smallholders, among others.
“The B20 programme (biodiesel with a 20 per cent palm blend) is going to be rolled out in stages next year, and since palm oil is a commodity, you will see the price fluctuating.
“Currently, it is trading above RM2,900 per tonne, but come January 2020, it might drop to RM2,700 per tonne, therefore we need to have this stabilisation fund,” said Kok.
She added that the windfall tax collection will vary as it depends on palm oil prices, adding that the government collected RM41.5 million in 2014, RM115 million in 2016 and RM208 million in 2017.
Kok hopes the palm oil price would hover above RM2,500 per tonne throughout next year, allowing MPI to collect more windfall tax.
“We are going to set up a special trust fund to give back to the industry. I hope 2020 will continue to be a good year for the Malaysian palm oil industry.
“Next year, we hope 70 per cent of oil palm areas will have Malaysia Sustainable Palm Oil (MSPO) certification so that I can have a good story to tell, especially to the European Union, during my trip next March,” she said.
Her ministry had also announced a RM1 increase in cess — in addition to the RM13 that industry players are already paying — to support the government’s green initiatives, which, among other things, involves planting more forest trees as well as wildlife and biodiversity conservation efforts, particularly in Borneo.
According to Kok, MPI is at the final stage of preparing the oil palm plantation map for public viewing, which is expected to be completed by February next year.
She is also looking forward to share the stories on Malaysia’s sustainability efforts with the European leaders and commissioners.
“I hope to lobby them to recognise MSPO since they want sustainable palm oil; now we have the standard, benchmarked on the German CSPO standard so we hope they will recognise it and accept our palm oil.
“I also hope that we don’t need to go to World Trade Organisation (on the trade barriers issued against palm oil) and resolve it through diplomatic relations and all the good efforts we had done. Of course we also want to also explore new markets,” she added. – Bernama