Published January 20, 2009

KL mulls scrapping of palm oil tax

	Email this article
	Print article
	Feedback

(KUALA LUMPUR) Malaysia's government is considering a request by domestic palm oil producers to scrap a windfall tax after the price of the commodity slumped.

'I have handed over the proposal to the government through the Ministry of Finance for further consideration,' Minister of Plantation Industries and Commodities Peter Chin told reporters yesterday. He did not say when a decision might be made.

The tax was introduced last July when the price of palm oil was almost double the current level. Profit at growers have fallen from records after fertiliser costs soared and the edible oil slumped as the global recession deepened.

The tax was applied to planters when they sold palm oil for more than RM2,000 (S$837) a tonne, and at a time when the vegetable oil fetched RM3,575 on the Malaysian market. Palm oil for April delivery now sells for RM1,860.

A request by producers for a refund on tax that has already been paid is not fair, Mr Chin said.

The government plans to swap palm oil worth US$60 million for fertilisers from North Korea to help growers at home cut costs, he said. The government is also seeking to swap the edible oil for fertilisers from Iran, Syria, Morocco, Jordan, Cambodia and Vietnam, he added. -- Bloomberg