Should windfall profit levy for Sabah and Sarawak be reduced?

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The Malaysian Palm Oil Association (MPOA) has proposed a reduction in the windfall profit levy (WPL) rate for oil palm growers in Sabah and Sarawak.

The Malaysian Palm Oil Association (MPOA) has formally requested the government to halve the windfall profit levy (WPL) rate for oil palm growers in Sabah and Sarawak from the current three per cent to 1.5 per cent. This proposal is part of the association's submissions for the upcoming Budget 2024.
Windfall Profit Levy Rate Reduction for Sabah and Sarawak

The MPOA is advocating for a specific reduction in the WPL for oil palm producers in the East Malaysian states. Currently set at three per cent, the association believes this rate should be reverted to 1.5 per cent. This adjustment is being sought in light of increasing production costs faced by growers in these regions.
Proposed Increase in WPL Price Threshold

In conjunction with the proposed rate reduction, the MPOA also seeks an upward revision of the price threshold at which the WPL is applied. The association has requested an increase of RM500 per tonne of crude palm oil (CPO). For growers in Peninsular Malaysia, this would raise the threshold to RM3,500 per tonne, while for those in Sabah and Sarawak, the new threshold would be RM4,000 per tonne. These adjustments aim to provide greater financial relief to producers.
Call for Replanting Tax Incentives

Beyond the windfall profit levy, the MPOA has highlighted the critical need for government support for large-scale replanting initiatives. The association is calling for tax incentives, specifically the extension of the reinvestment allowance (RA) tax incentive to cover oil palm replanting. Furthermore, they propose that this allowance should be usable against a company's statutory income. This measure is intended to encourage accelerated replanting, which is deemed essential for maintaining the sector's future productivity and competitiveness, especially given that approximately 11.6 per cent of the country's oil palm trees are currently aged 25 years or older and overdue for replanting.

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Should windfall profit levy for Sabah and Sarawak be reduced?

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