Malaysia To Review Windfall Tax On Palm Oil
Malaysia is currently reviewing a windfall tax on the palm industry. According to plantations and commodities minister Fadillah Yusof, said review would hopefully be completed by next year.
Malaysia is currently the world’s second largest producer of palm oil. However, for many years now, the planters within the industry have asked the government to reassess the tax rate on their trade and the threshold for the windfall profit tax.
For those who don’t know, a windfall tax is a tax imposed by governments against certain industries when economic conditions allow those industries to experience significantly above-average profits.
According to Reuters, Malaysia currently has a windfall tax of 3% imposed on palm oil prices above 3,000 ringgit (US$640.48) per tonne in Peninsular Malaysia and above 3,500 ringgit per tonne in Sabah and Sarawak, both of which are among the largest palm oil producing states in the country.
The Windfall Profit Levy is currently under the purview of the Royal Malaysian Customs Department and all registered industry players follow the existing registration and payment system.
The minister added that the next step would be to bring the discussion to the Ministry of Finance.