KUALA LUMPUR: The government is raising the threshold of the windfall tax for the palm oil sector from RM2,500 to RM3,000 for Peninsular Malaysia, said Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz.
The government is also raising the levy from RM3,000 to RM3,500 for Sabah and Sarawak, while the levy rate in the two states will be aligned with the peninsula at 3.0 per cent.
"The government has allocated RM35 million to implement a replanting scheme by smallholders to further support the palm oil industry," he said in his tabling the 2022 Budget in Parliament here today.
Tengku Zafrul said another RM20 million has been allocated to counter international anti-palm oil activities.
Meanwhile, the Malaysian Palm Oil Board (MPOB) director general Dr Ahmad Parveez Ghulam Kadir said the 2022 Budget had brought a number of good news to oil palm industry besides the smallholders.
"The higher threshold is good news to the oil palm plantation in the country as it is timely due to rising cost of production especially for fertiliser, chemical and labour," he told the New Straits Times.
With the current high palm oil price, Ahmad Parveez said this would help plantation companies to make more profits to better managed their plantations as well as increase mechanisation and automation efforts.
"This incentive will surely reduce government income. However, this could be considered as a present by the government to the oil palm sector for its contribution to national economy," he added.