Bangui: The competitiveness of Malaysia’s palm oil industry is at risk if the temporary tax is not revised, said Plantations and Commodities Minister Johari Abdul Ghani.
“If this temporary tax is not revised, it will reduce the competitiveness of our palm oil products against other countries such as Indonesia, the world’s number one palm oil producer. We are the second largest palm oil producer in the world,” he told reporters after presiding over the 30th Malaysian Palm Oil Board Technology Transfer Seminar and Exhibition today.
Johari pointed out that when the government initially imposed the temporary tax, the production cost of one tonne of palm oil was 1,800 ringgits.
“But today, the cost has gone up significantly. It has reached almost RM3,000. For large businesses, the cost is about RM2,800. For small businesses, it can go up to RM3,200. So, on average, it’s about RM3,000,” he explained.
Johari added that the tax reform would indirectly encourage replanting, making Malaysian palm oil more competitive and potentially attracting more investment in the 5.7 million hectares of land available for replanting and increasing yields.
The ministry will therefore submit this decision to the Ministry of Finance for review.
“That is the ministry, my mission as secretary-general. We will present this proposal to the Ministry of Finance to make them understand the importance of encouraging replanting to make agricultural products more competitive and generate higher returns,” he said.
Speaking during a question and answer session in Parliament on Tuesday, Johari proposed reviewing the windfall profits tax (WPL) on palm oil in line with commodity prices in Budget 2025.
In its 2022 Budget, the government changed the temporary levy on local palm oil producers to the standard 3% if crude palm oil (CPO) prices exceed RM3,000 per tonne in Peninsular Malaysia and RM3,500 per tonne in Sabah and Sarawak. Previously, it was 3% if CPO prices were above RM2,500 per tonne in Peninsular Malaysia and 1.5% if CPO prices were above RM3,000 per tonne in Sabah and Sarawak.
Six new technologies were launched at yesterday’s event: the Clonal Palm Series 4 oil palm variety; a radio-controlled hydrostatic flail mower agricultural machine; and four oleochemical innovations: a palm-based food-grade biodegradable grease, a palm-based industrial liquid cleaner, a palm-based adhesive for home and plantation pest control, and a palm-based transformer oil.
Johari has begun commercialising two products: Walbac eco-friendly biopesticide and MPOB fertiliser formulations F2 and F6.
Additionally, MPOB has signed five Memorandums of Understanding for the commercialization of MPOB fertilizer formulations, palm oil based grease formulations and endophytic bacteria liquid. Reishi Technology transfer on the control of (a type of fungus) and the production of oriented strand board compositions.
Johari also launched “MPOB TECH” as a registered trademark to “stand behind” all commercialized MPOB technologies.
MPOB TECH represents the brand of MPOB, a government research institute in the palm oil industry with a reputation for technological innovation.
“The use of the MPOB TECH logo enhances the brand development of products and services resulting from MPOB’s research, development and innovation,” MPOB said in a statement.
