Posted by Keyman188 > 2021-10-31 18:26 | Report Abuse

Sabah, Sarawak palm oil players cry foul over doubling of windfall profit levy rate

(theedgemarkets.com / October 31, 2021 14:25 pm +08)

KUALA LUMPUR (Oct 31): Palm oil growers from Sabah and Sarawak are crying foul over what they deemed to be the unjust doubling up of the windfall profit levy rate from 1.5% to 3% to be imposed on those who operate in the two states, as proposed under Budget 2022.

In a statement, the planters said the 1.5% levy for East Malaysia was implemented by the former government because Sarawak and Sabah growers also have to contend with a state CPO sales tax of 5% and 7.5% respectively, after a threshold of RM1,500 per ton. No other states in Malaysia have this tax, they said.

"With the doubling of the levy from 1.5% to 3%, the sense of equity seems to have been removed from the East Malaysian States by the present government and (there is) a sense of using East Malaysian States to subsidise the opportunity losses by the West. It puts a new meaning to 'Keluarga Malaysia'," the planters said.

The statement was jointly issued by the Sarawak Oil Palm Plantation Owners Association, The East Malaysia Planters’ Association, Dayak Oil Palm Planters Association, Chinese Chamber of Commerce Tawau, Tawau Agriculture Association, The Malaysian Estate Owners’ Association, and the Chinese Chamber of Commerce Lahad Datu. Collectively, they are known as The East Malaysian Oil Palm Solidarity Group or EMOPSG.

While the government has also proposed to increase the threshold price for the windfall profit levy for Sabah and Sarawak to RM3,500 from RM3,000 — together with an increase to RM3,000 from RM2,500 for oil palm companies in Peninsular Malaysia — the Sabah and Sarawak planters said this is not enough.

The growers said production cost in East Malaysia is about 15% to 20% higher than in Peninsular Malaysia due to higher transportation, input materials, and labour.

“The last review of the windfall profit levy threshold was done in 2009, some 12 years ago. In these 12 years, wages and materials have risen 80% to even 100% for certain essential items such as fertilizer and chemicals along with labor. This in turn increases the production cost of the product. Palm oil is in a price taker and not a price maker business, it is a commodity.

“The levy is a “windfall” levy, this windfall levy has not been implemented to any other industries bar the oil palm industry. As its name dictates “windfall" or excessive profit, it only stands to reason that the threshold should be set at RM3,500 and for Sarawak and Sabah at RM4,000 per tonne," they said.

As such, they are appealing to the government to push the threshold price for the windfall profit levy for the East Malaysia growers to RM4,000, and to keep the levy rate at 1.5%.

The association said if the minister from the present government heeds the plea of the industry to raise the windfall Levy threshold to RM4,000 and keep the levy at 1.5% for Sarawak and Sabah, this will help offset the corresponding increase in the cost of production and nurture the industry towards being more competitive and sustainable.

“It will also show that the current Federal government does understand the struggles by the planters in Sarawak and Sabah. In particular Sarawak, where many land planted with oil palm are marginal, gives lower fresh fruit bunches yield and lower oil extraction rate (oil per hectare). In addition, many plantation companies in Sarawak are still struggling with their loans because of new development done over the past 15 years,” it added.


Cont...

Posted by Keyman188 > 2021-10-31 18:26 | Report Abuse

Losses due to labour issue and unharvested ripe oil palm fruits

The group also highlighted that the industry has been grappling with the shortage of labour, as foreign workers could not be recruited due to the closure of international borders during the pandemic.

"As a result of the shortage, a high percentage of palm fruits were left unharvested and resulted in close to RM5 billion in financial losses to the industry and government revenue," they said, adding Sarawak and Sabah planters are continuing to suffer from such losses.

"Even though 2022 would likely be another good year in terms of favourable crude palm oil price, shortages of workers will continue to burden the industry. In a worst-case scenario, East Malaysia companies would suffer further losses should the Federal government insist on raising the windfall profit levy on East Malaysia," they said.

This, they explained, is because windfall levy is still paid if one sells the produce, even if the planter made losses, as levy is calculated based on the price.
Appeals to Sabah and Sarawak state govts for help

The group is also requesting that state governments who have benefitted from the CPO sales taxes to also play a part in protecting the industry.

“We would like to appeal to the State Governments of Sarawak and Sabah to take proactive steps to safeguard the oil palm industry, including active and inclusive stakeholder engagements and consultation in all policy making processes, in line with 'Keluarga Malaysia',” they added.


## https://www.theedgemarkets.com/article/sabah-sarawak-palm-oil-players-cry-foul-over-doubling-windfall-profit-levy-rate

Posted by abang_misai > 2021-10-31 18:27 | Report Abuse

Buy MKH as its palm oil estate is in the Kalimantan

Posted by Keyman188 > 2021-10-31 18:28 | Report Abuse

These companies may be subjected to the one-off 33% prosperity tax
Seah Eu Hen

(theedgemarkets.com / October 29, 2021 23:59 pm +08)


KUALA LUMPUR (Oct 29): Investors' fear of a surprise corporate taxation came true when Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz announced a one-off 33% "Cukai Makmur" (Prosperity Tax) on companies that make more than RM100 million in profit for the year of assessment 2022.

The "Cukai Makmur" is a one-off tax measure introduced by the federal government in Budget 2022, whereby earnings above the RM100 million mark will be taxed at a rate of 33%, instead of the blanket 24% rate previously.

Among over 900 public-listed companies on Bursa Malaysia, 145 of them earned over RM100 million in their financial year 2019 (FY19), while there were only 125 such companies in FY20, based on Bloomberg data.

Only 113 companies managed the same level of pre-tax earnings across the last two financial years, according to Bloomberg data.

Banks and big plantation companies are seen as the obvious targets.

The FBM KLCI constituents such as Malayan Banking Bhd, Public Bank Bhd, Tenaga Nasional Bhd, Top Glove Corp Bhd and Petronas Chemicals Group Bhd were among the 113 companies that managed over RM100 million consistently across the two financial years. (see table)

Glove makers such as Careplus Group Bhd and Rubberex Corp (M) Bhd as well as semiconductor automated testing equipment (ATE) and packaging companies, such as ViTrox Corp Bhd and Unisem (M) Bhd also saw their pre-tax earnings rise in FY20 compared with FY19.

It is unclear if the "Cukai Makmur" will apply to all companies as the current year of assessment differentiates tax rates depending on the paid-up capital of the company according to the Inland Revenue Board.

For the year of assessment 2020, companies with paid-up capital of less than RM2.5 million are charged a 17% tax rate for their first RM600,000, while the extra income will be subjected to 24% tax rate. Companies with paid-up capital of above RM2.5 million, however, will be subjected to a tax rate of 24% regardless of their income generated.


## https://www.theedgemarkets.com/article/these-companies-may-be-subjected-oneoff-33-windfall-tax

Posted by smartly > 2021-10-31 18:30 | Report Abuse

Posted by abang_misai > Oct 31, 2021 6:27 PM | Report Abuse

Buy MKH as its palm oil estate is in the Kalimantan
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abang_misai got foresight. sapu.....

Posted by Keyman188 > 2021-10-31 18:31 | Report Abuse

Cukai Makmur, stamp duty changes may dampen near-term market sentiment, says Malacca Securities

(October 31, 2021 18:16 pm +08)

KUALA LUMPUR (Oct 31): The proposed one-off windfall tax called “Cukai Makmur” and proposed changes to the stamp duty on contract notes for listed share trading may lead to a knee-jerk reaction and dampen market sentiment in the near term, said Malacca Securities Sdn Bhd.

Under Budget 2022, the government has proposed to impose the Cukai Makmur on companies (other than the micro, small and medium enterprises) that generate high income during the Covid-19 period effective the year of assessment 2022. The chargeable income above RM100 million will be taxed at 33%, while a 24% tax rate applies for chargeable income of up to RM100 million.

‘’Around 15% of the public listed companies are having more than RM100 million profit before tax and the total earnings impact will be roughly a decline by 10%-12% on the FTSE Bursa Malaysia KLCI (FBM KLCI) heavyweights (based on back of the envelope calculation),’’ the brokerage said in a note on Sunday (Oct 31).

Malacca Securities said stock broking firms and Bursa Malaysia may also experience softer trading activities amid the removal of capping of RM200 contract notes stamp duty effective Jan 1, 2022.

The RM200 stamp duty limit was introduced in 2003 to boost the capital market in Malaysia.

Nonetheless, despite the Cukai Makmur being proposed, Malacca Securities foresaw some winners from Budget 2022, including those in the automotive, consumer, telecommunication, technology, healthcare, e-sports, tourism and healthcare sectors.

The brokerage is neutral on the construction, property, security and defence, and transportation and logistics sectors.



## https://www.theedgemarkets.com/article/cukai-makmur-stamp-duty-changes-may-dampen-nearterm-market-sentiment-says-malacca-securities

Posted by Keyman188 > 2021-10-31 18:32 | Report Abuse

At this moment...some IBs shy to provide outlook for plantation sector since upcoming 2022 need to pay so much levy...


Amboi...

Posted by winterwolf > 2021-10-31 18:36 | Report Abuse

income derived from oversea also subject to tax.

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Posted by smartly > Oct 31, 2021 6:30 PM | Report Abuse

Posted by abang_misai > Oct 31, 2021 6:27 PM | Report Abuse

Buy MKH as its palm oil estate is in the Kalimantan
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abang_misai got foresight. sapu.....

Posted by Keyman188 > 2021-10-31 18:45 | Report Abuse

For this issue...very subjective...

Simple for those Big Players...they know how to park all funds to outside Malaysia...no necessary need to bring back home...




Posted by winterwolf > Oct 31, 2021 6:36 PM | Report Abuse

income derived from oversea also subject to tax.

Posted by Keyman188 > 2021-10-31 20:23 | Report Abuse

See which big cap planter will hit the most tomorrow...


Amboi...