Government Unveils RM3,150 Levy For Palm Oil In Peninsular Malaysia

In a bid to bolster the country’s palm oil sector, the Government of Malaysia has announced several significant measures in Budget 2025. The proposed changes include raising the threshold for the extraordinary profit levy on fresh fruit bunches of oil palm to RM3,150 for Peninsular Malaysia and RM3,650 for Sabah and Sarawak. Additionally, the market price range and export duty rates for crude palm oil will be reviewed starting 1 November 2024, while maintaining current export conditions for crude palm oil from Sabah and Sarawak.

To further support smallholders, the government will continue to offer incentives for replanting non-productive palm oil trees, allocating RM100 million for this initiative. Malaysia, as one of the world’s largest palm oil producers, is also set to explore the potential of producing sustainable aviation fuel (SAF) from palm oil mill waste. Petronas is collaborating with SD Guthrie and FGV Holdings Berhad for this initiative.

Furthermore, the government has introduced tax incentives for automation in the manufacturing, services, agriculture, and commodity sectors. This includes an Accelerated Capital Allowance for one year and income tax exemptions on similar capital expenditures. These incentives aim to encourage companies to adopt advanced technologies, such as drones and AI, thereby reducing reliance on foreign labor.

The government is also committed to defending the palm oil industry against misconceptions in Europe and enhancing sustainability standards with an allocation of RM65 million.

In relation to the rubber industry, the Government will implement a Matching Grant Program under RISDA, providing RM60 million to encourage smallholders to produce latex rubber for industrial needs. Additionally, abandoned rubber estates will be revitalized with a budget of RM20 million through a leasing approach, allowing smallholders, executing agencies, and landowners to share profits based on mutual agreements.

To combat pests affecting rubber production, an allocation of RM10 million will be used for mitigation and disease control measures to prevent further losses.

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Tags: export, Crude palm oil, Malaysia, palm oil, export duty, market price, levy, smallholders