Chin: Windfall tax exemption from July 15

By Lim How Pim
KUCHING: Operators of oil palm plantations of less than 100 acres in size will be exempted from the windfall levy tax starting July 15.

Plantation Industries and Commodities Minister Datuk Peter Chin Fah Kui said this was decided at Friday’s federal cabinet meeting following several appeals from oil palm smallholders.

The smallholders had appealed through their respective Barisan Nasional (BN) MPs and to his ministry as well as the Ministry of Finance in view of rising operation costs, he told reporters after attending Sarawak United People’s Party (SUPP) central working committee (CWC) meeting at the party’s headquarters here yesterday.

Chin believed that the decision was good news to oil palm smallholders throughout the country as many of them had complained about the soaring costs of fertiliser, pesticides and labour.

The windfall levy tax which is based on the price of crude palm oil (CPO) is 7.5 per cent for Sabah and Sarawak and 15 per cent for Peninsular Malaysia, he said.

He pointed out that larger plantations normally had bigger harvests which helped bring down operation costs by way of economies of scale.

“With bigger volume they still make some money after tax,” he said, adding that the exemption would bring about ‘new development’ to the state, particularly the northern part like Bintulu.

There were between 25,000 and 30,000 small oil palm plantations in Sarawak and 400,000 nationwide with the majority of in Sabah.