Cess of Malaysia is Different from CSF of Indonesia

Cess of Malaysia is Different from CSF of Indonesia

InfoSAWIT, JAKARTA –Through the Custom Policy of Malaysia Act 1967, the country has implemented the crude palm oil (CPO) tax to get. Just like Indonesia, the export tax in Malaysia is published to maintain the CPO stock.

The refinery industries and downstream sector in Malaysia could be better to develop. Years before, the country once argued with Indonesia about the export tax policy.

When Indonesia wanted to develop the downstream industries, Regulation of Secretary of Treasury (RST) No. 129 / 2011 was published and it was revised for many times until the latest one, RST No. 128/2013. This changed the percentage of Out Fee structure to CPO and its derivative.

As the result, the downstream products from Indonesia got more economical in the world rather than the products from Malaysia. This raised bad trade competition. There was tension between the two countries.

Indonesia and Malaysia are different. In April 2015, Indonesia agreed to make CPO Support Fund (CSF) as the CPO citation. It is said, if the money has been gathered, CSF would be returned to palm oil plantation industries as the subsidy to develop biodiesel and fund subsidy to replanting program for the people.

Based on what InfoSAWIT traced, in Malaysia,the same tax has been running since 1998 when Palm Research Instutute of Malaysia (PORIM) was merged with Palm Oil Registration and Licensing Authority (PORLA), to be Malaysian Palm Oil Board (MPOB).

In the regulation of Malaysian Rubber Board (Cess), paragraph 35, Act 582, mentioned, to run the Cess Policy, the Secretary, after making consultation with Secretary of Treasury, should limit the establishment, variation, and the cancell of Cess.

The policy also regulates that the citation is managed by MPOB. In paragraph 34, MPOB as the management of citation should use and keep the fund, and could use it as the regulation.

Until now, Cess Malaysia keeps running. From every 1 ton of CPO, the Cess would be RM 15 and RM 11 for palm kernel oil (PKO). Fromthe Cess, about RM 7/ton would be for research and development, and about RM 4/ton would be for price subsidy.

Not only for research and development fund, Cess was once used by the government to help domestic cooking oil industriies by giving subsidy for 60 thousand tons of olein in every month in 2007. It was in Cooking Oil Stabilization Scheme (COSS).

This was to give back the loss that the cooking oil producers got. At the time, CPO was expensive and made the operational cost expensive too. It is said, the most expensive cooking oil was RM 1.700/ton.

Cess for COSS was implemented to the palm oil plantation owners having more than 40,46 hectares. Still from MPOB, there are about 3.639 plantation owners in Malaysia that could fulfill the condition of Cess. (T2)

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