Windfall Profits Tax On Oil
Â
…Palm oil, that is. Reddish gold. Sime Tea.
Ok, so the Jed Clampet thing doesn’t work all that well here. Forget about it.
But the importance of palm oil to the Malaysian economy shouldn’t be underestimated.
Malaysia is the world’s largest palm oil exporter. And, apparently, plantation owners have been successful enough at squeezing that stuff out (palm oil), that government officials have figured they ought to be able to squeeze a bit more themselves (taxes). Â
Palm oil farmers with more than 40 hectars of land will get a new monthly bill that…
…will be at three percent of the profit made for every one metric tonne of FFB in plantations in Peninsular Malaysia and at 1.5 percent rate for plantations in Sabah and Sarawak.
Those that don’t comply with this tax will face steep penalties, including jail time.
About half a million people in Malaysia either grow the crop, or are connected to the industry. Malaysia is the word’s leading producer of the stuff which quite possibly may “have now surpassed soybean oil as the most widely produced vegetable oil in the world.”
So what’s the big deal with an additional few percent tax on profit?
True, there are reserves now, but indications point to demand for the product increasing ever more.
Given the already high prices on food, and understanding that manufacturers will, quite naturally, pass an increased expense along to the consumer, one can’t help but wonder what the impact of an additional tax will eventually have on the average person.
Does the regional economy need yet one more added expense, however slight, to ripple through the commodities market?
