KOTA KINABALU: The sales tax of 7.5% on palm oil should be reduced as it is a burden on smallholders in Sabah, especially at a time when they are unable to maximise profits, says Parti Warisan deputy president Datuk Darell Leiking (pic).
He said the state government must “review, enhance and manage” the palm oil industry properly to ensure it would benefit Sabahans directly.
“Issues of labour in the palm oil industry fall under the Roundtable on Sustainable Palm Oil (RSPO) guidelines. It is imperative that the state government play its role as the facilitator, especially in terms of workers’ documentation,” he added.
He also suggested the creation of a separate database on Crude Palm Oil (CPO) and other palm oil derivative revenues contributed by districts producing palm oil.
“Such districts should benefit in terms of public infrastructure and utility upgrades in development funds.
“All these districts receive at least 40% in returns from their respective contribution in terms of revenue,” said Leiking, who is a former international trade and industry minister.
“Until and unless we have achieved our food self-sufficiency level target and the completion of the restructuring of the palm oil industry in the state, Sabah must prioritise the welfare of Sabahans by banning all types of export of cooking oil and to intensify monitoring at the border to prevent smuggling of the consumer item to neighbouring countries,” he said.
Warisan’s Tunku assemblyman Assaffal Alian said issues currently faced by palm oil smallholders in Sabah, especially labour shortage, would affect the supply of subsidised cooking oil in the market.
“There is a need for the state government to prepare for the mass return of Indonesian workers to Indonesia and also the potential threat of El Nino,” he said.
Assaffal said last year’s cooking oil shortage in Sabah saw the price of 1kg of subsidised cooking oil soaring from RM2.70 to RM6 per packet.
He said Warisan at first believed the shortage was caused solely by hoarding and smuggling.
But checks by the party with the Department of Statistic Malaysia report on Sabah GDP for 2022 revealed this was not the case.
The report stated that “the agriculture sector for Sabah fell by 0.2% (2021: -2.2%) owing to a contraction in the crops sub-sector, primarily oil palm activity, he said.
He said Warisan found from a Malaysian Palm Oil Board report that “CPO production in Sabah declined by 1.7% from 4.36 million tonnes in 2021 to 4.29 million tonnes in 2022”.
However, the CPO production in Peninsular Malaysia and Sarawak increased by 3.2% and 2.5% to 10.16 million tonnes and 4.01 million tonnes, respectively.
“We are curious as to why is it that both the peninsula and Sarawak registered an increase, but it was a decrease in Sabah,” he said, adding that Sabah has 1,326,940ha and Sarawak 1,488,917ha of mature palm oil land.
“It would be illogical to say that weather was the cause of the decrease since both states are located on the same island.
“Warisan now believes that the incidence of subsidised cooking oil shortage in the Sabah is not caused only by exports or smuggling of cooking oil to neighbouring countries, but also due to insufficient manpower to harvest oil palm fruits.
“The smallholders are unable to maximise their profits and yet are expected to pay the sales tax of 7.5%.
“With the mass exodus of Indonesian workers from Sabah to Kalimantan imminent as more and more labourers will be required at that region, and compounded by El Nino threat, Warisan foresees a shortage of subsidised cooking oil unless the state government acts now,” Assafal added.
