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2.5% cess – MPs should raise Sabah plight September 26, 2007

Posted by wong jimmy in Oil Palm.

Members of Parliament in Sabah should call for a motion in parliament on the extra 2.5% cess imposed on Sabah oil palm planters on top of the 7.5% tax already imposed by the state government.

This is due to the unfair treatment the planters have to face compared to Sarawak and Peninsula’s planters.

The 2.5% cess which was passed by cabinet in order to fulfill the Cooking Oil Stabilization Scheme (COSS) to subsidize cooking oil packagers so that consumers would enjoy low cooking oil price was a noble move, but it had totally overlooked the Sabah planters plight in having to absorb the extra cess.

The Sabah planters are being squeezed the most, now they have to cough out 10%, before it was only 7.5%. Apart from that, the diesel and petrol price which also had increased and causing an extra 5 cents here, the fertilizers cost is also higher here compared to peninsular, so I see it only fair for the 2.5% cess to be tabled again especially for the Sabah planters by taking into consideration all the higher cost they have to pay in order to run their oil palm plantation.

On equal term basis base on population, Sabah planters only need to pay 10% or RM41million of the needed RM400million and peninsular planters the balance as the bulk of consumers are there.

West Malaysia planters all this while enjoyed zero percent cess or contribution, so by right the 80% of the RM400 million COSS should come from West Malaysia.

I am concern that the extra cess would gradually put a dent in the oil palm sectors here, which is the pillar for Sabah economy; it is an urgent matter to be brought up in parliament before Sabah face an economic disaster.

Prevention is better than cure, please don’t wait for something disastrous to happen then come to the rescue, I believe it would be too late and will cost more to save the industry then, so I make this call on behalf of the planters here who already feel the pinch and already voicing what they deeply feel is totally unfair to them.

I also suggest an alternative that the 2.5% cess imposed on the Sabah planters to be absorbed by the planter in peninsular as the population or consumers there is about 80%, while Sabah about 11%.

As I had pointed out that the bulk of consumers are in peninsular, so I see it is not fair for the planters here to pay the cess. But it is fair for the planter in peninsular should share the burden as they are enjoying lower cost of running and cheaper fertilizers for their plantations compared to Sabah.

It is very fair to exempt the planter here from the 2.5% cess and even very fair for peninsula’s planters to shoulder the Sabah planters 2.5% cess and hope the Federal government would see the fairness and rational of the suggestion.