KUALA LUMPUR: Windfall tax collected from the palm oil industry should be used to assist oil palm smallholders who are hard pressed, says Datuk Seri Dr Wee Jeck Seng.
"I propose that revenue from the windfall tax is channelled back to the palm oil industry to assist smallholders who are in the B40 group," he said when debating the Windfall Profit Levy (Validation) Act 2023 in Dewan Rakyat on Monday (April 3).
Wee (BN-Tanjung Piai) said there are about 500,000 smallholders who require help, particularly those in Sabah and Sarawak.
He added that the palm oil industry contributed about 30% to the national gross domestic product (GDP) or about RM137.9bil in palm oil exports last year.
"A total of RM6.4bil was collected as windfall tax from the industry in June last year.
"How much has since been collected?" he asked.
A 3% windfall tax is imposed on palm oil producers if their plantation exceeds 40.6ha and if crude palm oil exceeds RM3,000 per tonne in Peninsula Malaysia and RM3,500 per tonne in Sabah and Sarawak.
Wee said the windfall tax could be used to provide replanting grants to smallholders under the B40 group who have plantations below 8ha.
He added that the affected smallholders could also be provided with fertilisers for their plantations owing to the high cost of fertilisers.
The Act aims to indemnify the government for imposing windfall profit tax, particularly on palm oil producers, between Jan 1, 1999 and Jan 31, 2023.
This was because the windfall levy orders were not done in accordance with the Windfall Profit Levy Act 1998.
For the levy orders to be valid, they should have been tabled and approved by Dewan Rakyat, which was not done.
The law also prevents any action or legal proceedings to be brought against the government and its officers with regard to levy collected.
The move will validate windfall profit tax or levy imposed and collected by the government between Jan 1, 1999 and Jan 31, 2023.
Earlier, Datuk Ngeh Koo Ham (PH-Beruas) proposed that the windfall tax against the palm oil industry be abolished as it was discriminatory against larger plantations that were already burdened with other forms of taxes.
He also said that the windfall tax collected should be refunded to the affected companies as it was collected without proper orders.
"If the government wishes, there must be further amendments to the provisions of the Act to ensure fairness and justice for all," he added.
Earlier, Ngeh declared his interest in the matter before beginning his debate.
He informed the House that his legal firm filed a suit against the government on Nov 2 last year on behalf of his wife and him as shareholders of a palm oil company.
However, he said that a settlement was reached and the case was withdrawn last Thursday (March 30), allowing him to participate in the debates.
Deputy Finance Minister Datuk Seri Ahmad Maslan, in his reply, said there would be no refunds of the windfall tax which had been collected.
He said that the collected revenue had been used to subsidise cooking palm oil for the rakyat and development projects.
"Between January and March this year, a total of RM251mil was collected as windfall tax.
"In total, RM7.6bil in windfall tax has been collected since 1999," he said.
Of this, he said that RM5.86bil was used to subsidise cooking oil for the rakyat.
Ahmad said that RM480mil was used in 2018 to subsidise cooking oil, RM270mil (2019), RM530mil (2020), RM2.16bil (2021) and RM2.42bil (2022).
He said that there are currently 3,664 companies with oil palm plantations above 100ha, which are registered under the windfall tax.
He said the government is willing to consider revising the threshold for crude palm oil for the windfall levy.
The Act was passed by Dewan Rakyat through a majority voice vote.
