Area
Malaysia
Commodity Group
Oilseeds, oils and meals
Commodity
Palm oil
Date
01/01/2020
Policy Category
Other
Policy Instrument
Tax policies
Description
Resumed following improvements in market prices windfall profit taxation for oil-palm growers, pledging to channel at least 50 percent of the proceeds back to the oil-palm industry, notably in the form of subsidies for palm oil-based biodiesel production.
Notes
MALAYSIA profit taxation: With palm oil reference prices rising above the MYR 2 500 (USD 613) per tonne mark that triggers windfall profit taxation, on 1 January 2020, tax authorities resumed collecting 3% and 1.5% tax from growers in, respectively, Peninsular Malaysia and Sabah/Sarawak (NB: Malaysias palm oil windfall taxation was introduced in 2008, together with changes in the countrys Cooking Oil Price Stabilization Scheme). Planters cultivating less than 40 hectares will remain exempt from taxation. In response to calls from the industry to withhold the levys reactivation, the Government pledged to channel at least 50% of the proceeds back to the oil palm industry. Reportedly, the proceeds would be set aside to subsidize palm oil-based biodiesel production once mandatory B20 consumption enters into force at the end of 2020 (see also MPPU Mar.&July19).
