Stating that the sector is known for its fluctuating crude palm oil (CPO) prices and low profit margins, June Leow (PH-Hulu Selangor) said it was unfair that the government had a windfall tax only for the palm oil sector.

“Last year, the finance minister said he did not want to impose a windfall tax on sectors such as glove manufacturing as he was afraid it would scare off investors,” she told the Dewan Rakyat.

“But the windfall tax is still imposed on the palm oil sector.

“This is not logical or consistent. Why is there still a windfall tax in the palm oil sector but not other industries?”

In a written parliamentary reply today, finance minister Tengku Zafrul Aziz again said the country does not intend to impose a windfall tax on glove makers or other businesses which have enjoyed strong profits during the Covid-19 pandemic.

Leow, whose constituency has around 35,000 hectares of palm oil plantations, said the government expects to collect RM1.2 billion in windfall taxes from the country’s palm oil industry this year thanks to record prices.

Palm oil producers are subject to a 3% levy when crude palm oil prices exceed RM2,500 per tonne in Peninsular Malaysia and a 1.5% levy when prices surpass RM3,000 per tonne in Sabah and Sarawak.

The PKR lawmaker also said anti-palm oil campaigns led by European countries gave the impression that it was a non-sustainable activity, an image which she felt the government must constantly work to dispel.

She added that these concerns have persisted although 88% of the country’s palm oil producers have Malaysian Sustainable Palm Oil certification.

Leow then questioned whether such certification was not enough for foreign buyers to trust Malaysian palm oil.