Kota Kinabalu, Wednesday, 24 February 2021
Hitting the palm oil industry with an additional cess of RM2 per ton of crude palm oil and palm kernel oil is damaging the economic recovery of the country, especially oil palm producing states like Sabah.
This new RM2 cess, effective on February 15, is on top of the RM14 (per ton of palm oil) that has been enforced ever since January 2020.
The current spike in CPO prices is caused by a combination of lower production and global economic recovery. The current good prices of CPO is not as rosy as it seems on the surface. It is common knowledge that many plantations are not able to fully harvest their fruits (fresh fruit bunches) due to problems of foreign labour.
As such, even though the rise in CPO prices is a welcome break for the palm oil industry, the current prices is not as profitable as what a tax collector might assume. Afterall, the palm oil industry is still at the early stages of recovering from the economic gloom caused by the Covid-19 pandemic.
I notice that each time that the oil palm sector is beginning to recover, the government will impose new taxes. Other than windfall tax, the palm oil industry had been hit with a new cooking oil subsidy that the oil palm industry is forced to bear on behalf of the whole nation in 2008.
How about the pharmaceutical sector benefitting from Covid-19?
It is also common knowledge that some big pharmaceutical companies are making good profits and laughing all the way to the bank, every day of the last one year.
If the government is looking for new revenues by way of windfall taxes, then one sector that has been raking in billions is the pharmaceutical industry and the Covid-19 tests companies, including the companies that handles the Covid-19 vaccines.
Datuk Yong Teck Lee
President, SAPP
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