KUALA LUMPUR (Dec 1): The Palm Oil Refiners Association of Malaysia (PORAM) disagrees with the Malaysian Palm Oil Board's (MPOB) plan to impose an additional RM5 cess per tonne during these trying times.
Chairman Jamil Haron said the palm oil industry was highly affected by the Covid-19 and the introduction of a RM5 cess would only burden, rather than support, the local industry and its supply chain.
“The Malaysian palm oil industry undoubtedly needs all the assistance it can muster from the government to regain its competitiveness. The introduction of the RM5 cess would harm the industry, while the industry is still struggling to recover from the impact of the pandemic.
“Therefore, PORAM is strongly of the view that the measure is highly counterproductive in the present difficult business environment,” he said in a statement today.
The proposed additional cess, scheduled to take effect on Jan 1 next year, is for the purpose of intensifying research and development (R&D) for mechanisation and automation in the upstream sector.
Jamil suggested that the government utilise part of the windfall tax for this R&D programme instead of pinning down the recovering palm oil industry with the proposed cess.
He noted that in early November, the government announced that the Malaysian palm oil industry would contribute an estimated RM348 million in windfall tax this year.
Jamil contended that the additional RM5 cess, on top of the existing RM14 imposed per tonne, would have far-reaching consequences despite being for only a year.
He said it would make Malaysian refined palm oil products uncompetitive in the international market as the additional cost in cess collection would be passed on to the refining industry.