Sibu: Seven major oil palm plantation companies in the state say they are burdened by taxes as high as up to 55 percent.
The companies-Ta Ann Holdings Bhd, Sarawak Oil Palm Bhd, Solid Timber, WTK Holdings Bhd, Woodman Kuala Baram Estate Sdn Bhd, Sarawak Plantation Bhd and the Rimbunan Hijau Group-are appealing to both the federal and state governments, asking for a reduction of taxes and cess contributions.
The seven accounted for more than 50 percent of the state palm oil annual production.
The palm oil cess imposed by the federal government on palm oil plantations is to subsidise the price of cooking oil.
At a press conference here Monday night, a spokesman for the group, Bolhair Redzuan, a senior executive of Sarawak Plantation, said they had six proposals for the federal government and three for the state governments.
The proposals were aimed at strengthening the position of the industry, he said.
“We want the federal government to consider waiving the windfall profit levy, the outstanding amount on Malaysian Palm Oil Board (MPOB) cess and the workers’ levy,” Bolhair said.
“At the same time we want it to review the discount on CPO (crude palm oil) price for Sabah and Sarawak, the MPOB oil cess and fertiliser subsidy,” he said.
Bolhair said the group was asking the state government to legalise the illegal foreign workers now employed in its oil palm plantations, saying the state was suffering from a shoratge of workers.
He said other proposals were for the government to consider reducing the special sales tax on CPO and palm kernel and deferring the local council assessment rates on the plantations for the first 10 years.
“Besides the hefty taxes, the industry faces challenges such as low CPO prices, escalating costs of fertilisers, chemicals and fuel as well as labour shortage where the reliance is 95 percent on foreign workers,” he said.
According to him, the group felt it was unfair for them to pay the windfall profit levy as Sarawak “is a late entrant in the industry and has the lowest area (at 20 percent) that can contribute to profit”.
Although Sarawak has, to date, developed 664,612 hectares, only 103,678 hecatres or 20 percent are income-generating or matured areas.
“Thus, we are still not yet financially self-sufficient in our operations. We still require huge cashflow or injection of funds,” he added.
Bolhair said the windfall profit tax affected not only the big players but small companies and smallholders who were still struggling to make ends meet.
“This is putting a lot of pressure on them. We are not questioning this policy of the government but wondering why the oil palm business is selected for this tax,” he said.
On the cess fee paid to MPOB to allow it to carry more research, Bolhair said the group hoped for a generous discount for the state in view of the age of the industry, the long gestation and investment recouping periods as well as the difficult soil and terrain conditions.
“We rather the fee be considered based on case-by-case basis. Perhaps the government can consider implementing differentials in terms of cess contribution where the bigger companies will have to pay more,” he said.
On fertiliser, Bolhair said it had drastically increased in prices by 150 to 370 percent and was still rising.
The capital investment in the form of plantation development expenditure in the industry has reached an estimated RM11.36 billion in the last six years of oil palm plantation growth in the state, he said.
The plantation sector has generated 14,000 direct job opportunities for Sarawakians, including management and operation staff. – Bernama