Daily Express headline “On Whose Side?” on 7th May 2008 and by “Tegas dari Sandakan” in DE Forum on 18th May 2008 drawn two very contrasting views on the subject of CPO sales tax 7.5% levied by the State Government on Millers operating in the State if the CPO price exceeds Rm1,000.00 per metric ton.
While it is true that Millers are made to pay CPO sales tax of 7.5% but it is wrong for the Chief Minister to say “the sales tax on CPO had nothing to do with the smallholders but only major oil palm players” or “some rich Towkays”.
“Tegas dari Sandakan” brought up an interesting point “How does CPO come about without its source, FFB, which naturally comes from planters of all land sizes?”
The devil is in the details. And it would be interesting to figure out how FFB price being calculated by Millers. SeeTable A
Our investigation reviewed, the general formula as shown inTable A were adopted for use in calculating the FFB price and this clearly show the cost of CPO sales tax paid by the Millers have been passed on to the smallholders in the form of lower FFB price.
The May 2008, FFB price per metric ton when computed in this format, is about Rm685 inclusive of CPO sales tax and if exclude tax - Rm738. Therefore, the difference between these two figures is Rm53, a walloping amount of CPO sales tax paid indirectly by the smallholders for every ton of FFB produced.
And as such Y.B Jimmy Wong (DAP) contended that the sales tax imposed on CPO was causing hardship to smallholders in the State is not entirely wrong and he is not “talking rubbish” as claimed by Musa in the House.
Base on my calculation the amount of CPO sales tax collected by the State up to April this year would have amounted to Rm434 million, seeTable B and at the on-going rate of CPO price, the State is expected to net in about Rm1 billion revenue for the whole of 2008.
So the question here is how the State Government going to utilize this huge amount of revenue collected from the plantation sector?
Therefore, it is only appropriate for Y.B Jimmy Wong to ask the State Government to set aside 30 per cent of the revenue collected from the CPO sales tax as Reserve Fund for emergency use. And I won’t hesitate to propose part of that Reserve Fund to be utilized to subsidize fertilizer cost to the benefit of the smallholders as the cost of such material have since escalated from Rm700 to Rm3,200 per metric ton.
While it is true that Millers are made to pay CPO sales tax of 7.5% but it is wrong for the Chief Minister to say “the sales tax on CPO had nothing to do with the smallholders but only major oil palm players” or “some rich Towkays”.
“Tegas dari Sandakan” brought up an interesting point “How does CPO come about without its source, FFB, which naturally comes from planters of all land sizes?”
The devil is in the details. And it would be interesting to figure out how FFB price being calculated by Millers. See
Our investigation reviewed, the general formula as shown in
The May 2008, FFB price per metric ton when computed in this format, is about Rm685 inclusive of CPO sales tax and if exclude tax - Rm738. Therefore, the difference between these two figures is Rm53, a walloping amount of CPO sales tax paid indirectly by the smallholders for every ton of FFB produced.
And as such Y.B Jimmy Wong (DAP) contended that the sales tax imposed on CPO was causing hardship to smallholders in the State is not entirely wrong and he is not “talking rubbish” as claimed by Musa in the House.
Base on my calculation the amount of CPO sales tax collected by the State up to April this year would have amounted to Rm434 million, see
So the question here is how the State Government going to utilize this huge amount of revenue collected from the plantation sector?
Therefore, it is only appropriate for Y.B Jimmy Wong to ask the State Government to set aside 30 per cent of the revenue collected from the CPO sales tax as Reserve Fund for emergency use. And I won’t hesitate to propose part of that Reserve Fund to be utilized to subsidize fertilizer cost to the benefit of the smallholders as the cost of such material have since escalated from Rm700 to Rm3,200 per metric ton.
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