SANDAKAN: Sabah Palm Oil Mill Association Executive Director Datuk Yap Yun Fook urged the State Government to review the 7.5 per cent crude palm oil (CPO) sales tax to ensure the relevant tax system complies with the principle of fairness.
Yap, who is also Smallholders’ Owners Association Advisor, said CPO sales tax collected by the State Government is often passed on to oil palm plantation owners by squeezing the price of purchased palm oil fruits. Ultimately, oil palm planters are inevitably affected.
He pointed out that the current policy of the State Government is to collect a 7.5 per cent sales tax from palm oil when the price of crude oil exceeds RM1,000 per tonne.
“However, this sales tax is not calculated on profit, but on gross amount, resulting in the capital of field operators also being taxed,” he said after attending a briefing on CPO sales tax, organised by the State Finance Ministry, here.
The briefing was chaired by State Finance Secretary Datin Mary Siepong on behalf of the Ministry’s Permanent Secretary Datuk Mohd Sofian Alfian Nair.
Also present were Andamy Plantation Group Chairman cum Sabah Economic Advisory Council Member Tan Sri Andrew Liew, Toupos Palm Oil Mill Sdn Bhd Chairman Tiu FUi Khiong and State Finance Deputy Secretary Brenda Majimbun.
Yap went on to say that CPO sales tax collected by the State Government is the main source of revenue for the Sabah treasury.
“After collecting relevant taxes, the Government must improve the road facilities in the State and pay strict attention to the oil palm industry, small businesses and the interests of the plantation owners,” he said.
He said oil palm operators and smallholders in Sabah are also facing high transportation costs and a shortage of foreign workers, and they urgently need the attention of the authorities to solve the problem.
He pointed out that many foreign workers working in oil palm plantations in the State have lived in Sabah for many years and do not have any documents, which makes it difficult for oil palm operators to apply work permits for them.
He said the shortage of foreign workers has seriously affected the oil palm fruit harvesting process, resulting in the embarrassing situation of “no one is picking the fruit”, causing the oil palm industry in the State to face at least 30 per cent business losses.
In addition, Yap hoped the State Government can vigorously promote and encourage the development of organic composting, so that oil palm residues can be mixed with waste materials and wastewater, and then added with specific enzymes for fermentation to become organic compost for use as fertiliser in oil palm gardens.
Towards this end, he hoped Chief Minister Datuk Seri Hajiji Noor will be considerate of the people’s sentiments and review the existing 7.5 per cent crude palm oil sales tax.
