Taxing issues for palm oil sector
KUALA LUMPUR (Oct 5): Although the palm oil sector has been the backbone of the Malaysian economy for over five decades, in recent years it has been beset by a myriad of problems, from rising production costs to stagnating yields to labour shortages.
Against this backdrop, the industry has been lobbying for a review of the windfall profit levy (WPL) that is imposed on oil palm growers.
Plantation and Commodities Minister Datuk Seri Johari Abdul Ghani has also proposed to the Finance Ministry to either abolish or raise the threshold price at which the WPL is applicable ahead of Budget 2025.
In an interview with The Edge, he explains that this is because the cost of production for planters has increased to an average of RM2,800 to RM3,000 per tonne. Given the lower crude palm oil (CPO) prices, the term “windfall profit” has become redundant.
Reintroduced in 2008, the WPL imposes a 3% tax when the price of CPO exceeds RM3,000 per tonne in Peninsular Malaysia and RM3,500 per tonne in Sabah and Sarawak. Smallholders are exempt from the WPL.
Tax experts also weighed in on the matter while Johari talks about other challenges facing the country’s palm oil sector in cover story 1 in this week’s issue of The Edge Malaysia.
In the second cover story, Malayan Banking Bhd (KL:MAYBANK) president and group chief executive officer Datuk Khairussaleh Ramli talks about the progress the banking group has made in its ongoing corporate strategy, known as M25+, under which it aims to achieve a return on equity of 11% to 12% by end-2025, among other targets.
In an interview, Khairussaleh stresses that M25+ is not just about chasing the intended business outcomes, but also about getting employees across the organisation used to a new agile way of working — one in which customers are put at the core of everything the bank does.
“The main thing about M25+ is that, while it is important to get the business outcomes in terms of performance, what is equally important is inculcating a new way of working across the organisation,” he says.
Khairussaleh, who took the helm in May 2022, also speaks on a wide range of topics, including the group’s challenge in growing net interest margins, optimism on the Indonesian operation and mergers and acquisitions.
Get the full story in this week’s issue of The Edge Malaysia.