M’sia Govt may earn palm oil windfall profit levy of over MYR500M in 2021

RAUB (BERNAMA) – The Malaysian government is expected to earn palm oil windfall profit levy of over MYR500 million in 2021 if the price of crude palm oil (CPO) remains stable at MYR3,000 per tonne until next year.

Malaysian Palm Oil Board (MPOB) Chairman Ahmad Jazlan Yaakub said this is an important contribution of the palm oil industry for the plantation sector to gross domestic product (GDP) as the country grapples with the COVID-19 pandemic.

“Palm oil prices may rise higher as foreign demand continues to rise. This is also because our stock is below two million tonnes, which is about 1.6 million tonnes.

“The palm oil windfall profit levy imposed on palm oil sales revenue at the current price level will enable the country to collect levy estimated at MYR348 million.

“If the price remains stable at the MYR3,300 per tonne and above level until 2021, the government may earn MYR500 million or more,” he told a press conference after the Malaysian Sustainable Palm Oil (MSPO) Certification Scheme for Smallholders Campaign.

MPOB Chairman Ahmad Jazlan Yaakub chats with oil palm smallholders after the launch of the MSPO. PHOTO: BERNAMA

Ahmad Jazlan said the windfall profit levy of three per cent is only imposed when the price of palm oil reaches MYR2,500 per tonne and above for the Peninsula, and 1.5 per cent for Sabah and Sarawak when the price fetches MYR3,000 per tonne and above.

Meanwhile, he asked more part-time independent smallholders to come forward to register for the MSPO certification to make it easier for them to market palm oil overseas.

“Smallholders in the country are estimated at 481,375, with independent smallholders accounting for 248,182, while planted areas under oil palm totalling 959,444 hectares.

“So far over 30 per cent of smallholders have been certified and many of those who have yet to obtain the certification are independent smallholders. The MSPO certificate is important, and it becomes a benchmark to meet international demand as it gives confidence to importing countries that palm oil is safe to use.”