by BERNAMA / pic by BLOOMBERG
THE government is expected to collect a potential revenue of RM348 million from the palm oil Windfall Profit Levy in 2020 compared to only RM256,000 in 2019 following rising crude palm oil (CPO) prices, the Ministry of Plantation Industries and Commodities (MPIC) said.
It said this was based on performance, price expectations and production of fresh fruit bunches (BTS) from estates throughout 2020.
For guidance, it said the levy is imposed at a rate of three per cent for palm oil prices exceeding RM2,500 per tonne in the Peninsula and 1.5 per cent for palm oil prices exceeding RM3,000 per tonne in Sabah and Sarawak.
“Crude palm oil (CPO) prices are expected to continue rising above RM3,000 per tonne, driven by positive market sentiment, expectations of declining stocks and rising exports, as well as global economic and political developments by end-2020,” Minister Datuk Dr Mohd Khairuddin Aman Razali said in a statement today.
He said in fact, CPO prices have shown a significant upward trend, jumping to RM3,424 per tonne on Nov 6, 2020 compared to its lowest level of RM2,021.50 per tonne on May 12, 2020, an increase of RM1,402.50 or 69.4 per cent.
“In an effort to boost the development of the palm oil industry, the ministry is also studying the overall structure of taxation and cessation in the plantation sector,” he said.
He said the CPO prices and movement in the market were determined by the power of demand and supply, as well as basic factors and market sentiment.
The increase in CPO prices not only helped increase the income of smallholders, as well as estates but also contribute to economic development for the prosperity of the country, he added.