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RM50 millions fund for smallholders is peanuts! January 10, 2009

Posted by wong jimmy in Oil Palm.



I am very disappointed as the State Government seemed to be not sincere in helping palm oil smallholders, knowing very well that the smallholders are still paying the 7.5% Sabah sales tax.


In a way, the RM50 million fund for smallholder announced by the Chief Minister Datuk Seri Hj Musa Aman showed that the state government acknowledged that smallholders need assistance after years of contribution to the state’s coffer.


However, the amount announced is too small compared to almost 10-years of their contribution through taxes and especially the immoral and cruel 7.5% sales tax which they are ‘forced’ to pay.


Knowing very well the smallholders are still paying the Sabah 7.5 percent sales tax, therefore the fund means nothing much but mere peanuts.


The soft loans, if all the 11,018 smallholders were to go for loans, each will get RM4,538 only, which is a very small amount compared to the cost of their production especially fertilizers. And on top of that do the smallholders have to pay any interest?


If the state government is really sincere then set the special committee to work on reducing fertilizer price. As for now, the smallholders, planters and the whole industry are asking what is the special committee doing.


Have they identified the cause of problems?

Have they found the weaknesses?

Have they come up with any concrete measures?

Have they met planters at all levels from small, medium to big plantations?

Have they held any dialogues with fertilizer suppliers, planters and millers at every district to find out their problems?


Even a simple thing I have been pointing out on the wrongfully implemented 7.5% sales tax, the special committee cannot look into and give me a satisfactory answer.

Everyone keep mum on this except to make statement that I am wrong and the 7.5% sales tax is charge on the CPO and not FFB or the smallholders.


My questions are simple, who is suppose to pay? The smallholders? The big plantations? The millers? Tell the planters who, they want to know, they have the right to know.


The planters had shown proof to me through their receipt that they are the one paying. Millers are not denying either that they are passing the buck because I had been informed that they will not be able to make profit if they are to pay. Furthermore the ‘Warta Kerajaan’ did not state clearly who should pay. Are we clear here?


With the high price of CPO early last year, the planters were already complaining. Now with the uncertainty of CPO price, the state government through this special committee must act immediately and not dilly-dally anymore as the future of the whole palm oil industry is in the State government hands.


The wises decision is to scrap the 7.5% sales tax, get back on the table and discuss with all the millers for a win-win situation. After all, the sales tax only came into existence because the state government needed money to organize the SUKMA that was held in Kota Kinabalu.


Here is how the immoral, cruel Sabah sales tax or at first know as Sabah CPO sales cess that came about due to anger and vengeance as the industry players failed to response to the state government call in helping to donate or sponsor for the SUKMA.


Because the response was bad, the Sabah CPO sales cess (as it was called then) was introduced on April 1, 1999. A RM50 per metric ton was imposed on CPO above RM1,000 per metric ton which was a fixed scale.


After the SUKMA, in 2003 the cess was no more, but the State government introduced 5% sales tax for CPO above RM1,000/mt in January 1, 2003.


And due to the encouraging market, the scale was raised to 7.5% in January 1, 2005 and this add more miseries among planters when the Federal Government CPO cess for Cooking Oil Stabilization Scheme (COSS) was introduced on June 1, 2007 which was very unfair to Sabah after having to pay so much including corporate tax, workers permits, high cost of fertilizers and having to put up with bad roads and so on without getting any in returns except being milked all the way and more blood sucked when the CPO price shot up.


Sad to say, now that the price had shot down, every one, the Federal government and the State government is merely giving lip service and throw a few candies here and there, maybe buying some time until the CPO price strengthened.


I say, MPOB and the State government only know how to dig into the palm oil industry players’ pockets when the going was good, but now that the going gets tough and uncertain, both are toothless.


It is like punching a person and giving a little medicine for their injury but at the same time still keep punching the person. Why kill the golden goose when it can keep on laying golden eggs.


All these sales tax and cess must stop, this is the only industry in the world where people have to pay tax before they calculate their profit and loss.


The State government should hold a meeting with all the palm oil industry players, be it small or big. I call for a fairer policy by the State government to formulate a similar policy that of the Federal government such as not to impose cess or sales tax on smallholders who own less that 100 acres. Don’t forget Sabah has the highest hard-core poor in the country. Where is the fairness when even small scale farmers too have to pay like the ‘big boys’. When will they ever come out of poverty then, where is the rational, the logic of helping the poor then?


The state government think-tanks, special committee and the executives must be reasonable in this aspect so that we could create a more conducive middle class at the same time elevate the hard-core poor standard of living without having to give them much aid through subsidy.


You want them to stand on their own two feet, you tell them to work hard to improve their living and not to expect too much from you. You want them to fish and not to expect you to give them fish, but what is happening you had taken their fishing rods.


Sorry I had got carried away there, back to the RM50 million special fund for smallholders.


I say, yes the RM50 million will be a big help, only if the 7.5% sales tax is abolished or waive or not charged to planters having less than 100 acres. And the sales tax only imposed on millers when the CPO price reach above RM2,000 per ton and with their production cost or overheads deducted out first.


Planters cost of production in Sabah is between RM1,500 to RM1,600 compared to Peninsular which is RM1,200 to RM1,300 due to the difference of fertilizer cost. The fund is best to be used specially for the subsidizing of fertilizer for smallholders.


The state government should also ensure that the daily CPO price fixed by MPOB should not be much difference between palm oil producing districts and states and weighing scales to be checked and calibrated as I have also received complaints from planters about weights.


If  the above is a tall order, then  I call for a new sales tax enactment stating who is to pay and showing clear calculations (similar to the Federal government cess calculation) to be passed by the Legislative Assembly would be a good start provided meetings are held between State government representatives with all sectors of palm oil players before the final draft.


For the record, my challenge to the Chief Minister to prove me wrong still stands. However, I will forgive the State government if the policy is changed and a new policy implemented which is fair to all.


By the way, I heard according from reliable sources some ministers have hundreds to thousand of acres planted with elaeis guineesis. If true, they should check their sales receipt whether they are being charged the 7.5% sales tax.






I’m not being mischievous, misguided December 19, 2008

Posted by wong jimmy in Oil Palm.
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I am not being mischievous and misguided over the oil palm issue affecting smallholders, it is State Finance Ministry Permanent Secretary Datuk Yusoff Kassim who was misguided and do not understand what is going on.


Yusoff said the Government had highlighted in the recent State Assembly Budget 2009 sitting that the 7.5% Sabah Sales Tax was imposed on Crude Palm Oil (CPO) only and this means the sale of Fresh Fruit Bunch (FFB) was not affected.


If he felft he is correct then ask the planters who produce FFB and they will tell you Yusoff is totally wrong. The sale tax does affects planters income because its deducted in their sale receipt.


If really the state CPO sales tax is being paid by millers or CPO producers, today I can guarantee all the millers would have stop operating or close shop.     


The special committee formed by the state government should immediately check or call the millers and ask them if what I said is true and if the committee cannot do this then the committee is for what.


The State government should ask CPO producers (millers) to make a stand and my challenge to the Chief Minister Datuk Seri Musa Haji Aman to prove me wrong is still on.


In Fact, by stating that I am mischievous, then Yusoff also mean the planters are also being mischievous as they had handed a memo to the State government regarding the CPO sales tax.


I would also like to inform the State government that Sarawak had already waived their CPO sales tax to help their oil palm industry to overcome the economic crisis. Here is Sabah the government says it is doing everything to help the oil palm sectors but at the same time reluctant to review the Sabah sale tax on CPO. This 7.5% Sabah sale tax will be the killing point on the planters and millers.



Sabah 7.5% Sales Tax – I will step down if CM can prove me wrong December 4, 2008

Posted by wong jimmy in Oil Palm.
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I will step down as assemblyman if Chief Minister Datuk Seri Musa Aman can prove that the smallholders are not being taxed the Sabah 7.5% Sales Tax.

I had already highlighted the error many times including at the State Legislative Assembly and even shown proves to the Chief Minister during the recent assembly.

It is the state government duty to correct what is wrong, I have come out with proves and many had also highlighted the matter in the news, but nothing is being done.

I will step down if CM can prove that I am wrong, and I hope CM too will do the same if he is wrong.

On the price issue I call the State Government to act immediately to help the oil palm sectors in the state that are now feeling the pressure and hard pressed due to the falling price of the commodity.

Without any concrete action from the government the situation will worsen and Sabah as the largest oil palm producers will become history.

I had many times urged the state government to review the 7.5% Sabah Sales tax imposed on the industry and had shown prove that the tax  has been passed to the smallholders no matter how small their plantation are.

If the situation is allowed to go on, it not only burden the planters especially smallholders but also make the state unattractive to investors.

I hope this issue will receive the government attention and drastic action as I had showed prove to the Chief Minister at the recent State Legislative Assembly that the smallholder are the one paying the 7.5% Sales Tax, though in the first assembly CM had told me that the government never taxed the small holders and only the big companies and I had proved to him that he got the wrong information.

With the Sabah Sales Tax matter coming to light and more people understanding the real situation, I hoped the state government would direct miller not to impose the 7.5% sales tax to planters.

Apart from that, the government should come out with a statement and explanation on what steps is being done, already done and will be done in connection with the fallen price of oil palm.

The people in the oil palm sector and me would like to know whether the special committee to tackle the issue had been set up? If already set up, what had been done to address the situation?

What I had voiced out on behalf of the oil palm industry should not be taken lightly as the price had gone down by about 70 percent compared to three months ago and cause loses not only to small holders but also big companies, millers, producers and fertilizer companies.

In fact, I am surprised to hear that a big listed company had to cut 20 percent of its employees salary following losses caused by the fallen price of oil palm. If not action is taken, I am sure the government plan to develop the Palm Oil Industry Cluster (POIC) will not bear fruit and POIC will be a ‘white elephant’.


7.5% Sabah Sales Tax – burden to smallholders November 24, 2008

Posted by wong jimmy in Oil Palm.

Have handed smallholders memorandum to Chief Minister Datuk Seri Musa Aman during the State Legislative Assembly recently and hope CM would see the problems faced by smallholders are real and true. With the current economic crisis and low price of CPO and FFB, failure to take immediate action and remedies will cause smallholders to incur loses. As the Sabah Sales Tax of 7.5% is taxed from the first RM1 without any deduction of cost, I hope the government would see the error made and immediately rectify it. As I has said the cost of production must be deducted out first before calculating the sales tax, then only there is hope or our oil palm sector.sales-tax

Memo To CM June 15, 2008

Posted by wong jimmy in Oil Palm.

Note: memo was handed over to state sec Datuk Hj Sukarti Wakiman this morning at a function in KK. He said the gov will study the matter.


Chief Minister Of  Sabah

Datuk Seri Musa Hj. Aman





It is proven now as the millers had admitted that all this while they have been charging the 7.5% sales tax on planters, be it small holders or big plantations. This proved that I was right from the beginning that the small holders were wrongly taxed and so the state government must rectify the situation immediately.


The government must direct the millers to stop charging the sales tax on FFB and the money should be refunded back to the planters.


I would also like to suggest that 30% of the sales tax be put aside for plantations road maintenance, replanting and for emergency use during economic crisis as had happened before with cocoa.


The planters must be given back something in return for their effort in helping with the state economy all this while. Their plight for good plantation roads must not be ignored. I personally had witness the bad road condition, which planters had to repair at their own cost. This is unfair especially after they had been taxed.


The shipping cost for millers too should be revoked and selling price for oil palm should be in line with Peninsular as we now have refineries here, moreover we are one of the biggest oil palm producers’ in Malaysia.


I hope the government would make a decision as soon as possible to remedy the urgent matter.






Yours truly,





YB Jimmy Wong

Tax Paid, But Plantations’ Roads are Bad May 22, 2008

Posted by wong jimmy in Oil Palm.
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Click to read news and see picture of one of the many bad stretches of road at Jeroco, Lahad Datu. I understand the feeling of the planters of Lahad Datu, Tawau and all planters in general. They paid their tax to the government, but the roads are not maintained, which should not be the case as they are one of the biggest contributor to the state’s economy. I hope the government would listen and not dilly-dally anymore and start using part of the income from the CPO sales tax  to repair plantation roads immediately. Good roads means faster transportation from plantation to mills. I understand that FFB (Fresh Fruit Bunch) once harvested must reach the mill within 24-hours. Any lateness would cause the FFA (Free Fatty Acid) to increase in the fresh fruit bunch and the miller would then deduct certain amount of money from the sales as penalty. Again the planters unnecessarily have to suffer not because of their fault. I appeal to the government to remedy the problem ASAP.

Forced To Absorb Cess May 19, 2008

Posted by wong jimmy in Oil Palm.
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Click thumbnail to read.

CM Missunderstood me May 9, 2008

Posted by wong jimmy in Oil Palm, State Legislative Assembly.
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At the State Legislative Assembly I was only asking in view of the double tax, one from the MPOB’s cess for Cooking Oil Stabilization Scheme (COSS) and the state government 7.5% sales tax.


I wanted to know whether the government would consider reducing the 7.5% sales tax, but was misinterpreted that I wanted it to be abolished.


The planters (smallholders) had complained to me that they had to pay even though if their FFB (Fresh Fruit Bunch) is only 1kilogram.


So I suggested the state government to consider exempting the 7.5% for smallholders with 100 acres below, where many smallholders are having 15 acres or even less, but are also being deducted on the spot FFB buyers or by CPO producers when they sell their FFB.


No doubt, government only tax after CPO price exceed RM1,000 per metric ton. But CM misunderstood me.


I think CM had in mind that only the CPO producers are being charged, but in reality those smallholders selling their FFBs are also being charged. This is ‘passing the buck’ and the government should investigate and clarify the matter especially to all the smallholders.


For the record, I am not on the ‘big towkays’ side, I stood at the state assembly to bring forth the smallholders plight especially those with 15 acres and below as the 7.5% defeats the government effort to eradicate poverty. So was I wrong, if I am wrong then I apologize, but I was telling the facts and not talking rubbish, so I hope the CM would investigate the matter thoroughly and clear the air.


There are still a lot of things that are unfavorable to oil palm planters such as the difference of price between Sabah and Peninsular. Though Sabah has the highest yield the selling price is lower, which is a great difference, but for now let us thrash out the sales tax first. 

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.


COSS – Unfair to Sabah August 18, 2007

Posted by wong jimmy in Oil Palm.
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The government decision on cooking oil stabilization scheme (COSS) without any consultation with the planters especially in Sabah is totally unfair. The government should do its homework first, as with the decision already reached to protect consumers and packagers, the government had overlooked Sabah planters, who is already being imposed 7.5% Sabah state tax few years back, now Sabah planters is being imposed another 2.5%, making it 10% because of the COSS, while in Peninsular and Sarawak planters are only being imposed 2.5%.

So who are going to help the Sabah planters for their extra losses, it’s not fair to Sabah, there is no transparency at all, it’s a one-way traffic. Have the government consulted the planters. It is against natural justice simply making decisions at their wimps and fancies. The government is asking too much. The planters have the right to say NO. It should be a win-win situation for all especially for Sabah that is the poorest state in the country. There are a lot of things to iron out here before a final decision is made.

And what about Fled in Sabah and SLDB (Sabah Development Board), are they being exempted because they are government agencies?

Press Statement by DAP Secretary General Lim Guan Eng in Petaling Jaya on 8.8.07

Peter Chin confused about cooking oil stabilization scheme (COSS) and in a State of Denial That Sabah Oil Palm Planters Lose Out More Than Peninsular Malaysia Planters Because He Ignores The Extra 7.5% Sabah State Tax.

Plantation Industry and Commodities Minister Datuk Peter Chin Fah Kui is clearly confused about COSS and in a state of denial that oil palm planters from Sabah lose out more than their counterparts from Peninsular Malaysia because he ignores the extra 7.5% Sabah state tax. Peter Chin denied two days ago that the government would collect RM1,790 million from oil palm planters as cess under the COSS to stabilize the price and ensure the supply of cooking oil to consumers. The estimate of RM1,790 million of cess collected is based on the average Crude Palm Oil (CPO) price of RM2,700 per tonne for 12 months.

In contrast, Chin is confusing the issue by projecting only about RM855 million in palm oil cess collection for the period from June this year to May next year, based on a price movement of between RM2,150 and RM2,650 per tonne for crude palm oil. He said cess of RM855 million would cover the RM788 million required for COSS to stabilize the ceiling price of cooking oil and compensate losses suffered by cooking oil packagers.

This confusing version by Peter Chin of the amount of cess collected and subsidies required for COSS is different from what was reported in the Daily Express of Sabah in May 2007. On 15 May 2007, Peter Chin estimated cess collected of RM661.2 million over the next 12 months. On 20 May, 2007, Peter Chin was quoted as saying that the Government would spend RM145.41 million under COSS to compensate the 11 cooking refineries and 193 packagers nationwide who have been suffering losses the past five months or about RM350 million subsidies required for COSS over 12 months.

Why is Peter Chin talking of RM855 million of cess collected now compared to RM661.2 million three months ago or COSS subsidies required of RM788 million now as compared to only RM350 million in May? What is clear from Peter Chin’s confusing two versions is that the cess collected far exceeds the COSS subsidies required.

DAP supports the COSS to ensure and affordable price of cooking oil to consumers. However COSS should not be used as a device to extract extra money over and above what is required from oil palm planters. Moreover, the extra company taxes collected by the government from oil palm planters following the rise in CPO price from RM1,500 last year to RM2,700 this year should be more than enough to cover the COSS subsidies.

There is no reason for the government to impose ces under COSS and DAP reiterates its call for its immediate abolition. This oil palm cess has also imposed an extra hardship for Sabah oil palm planters, who account for one-third of Malaysia’s oil palm production, because Sabah imposes a special 7.5% tax not imposed by other states. For Chin to say that the planters in the state were in fact enjoying better nett income due to the rise in the prices of CPO and FFB when compared to the gain made by plantation operators in Peninsular Malaysia shows that either he is in a state of denial or deceiving not only himself but also others.

Peter Chin should hold a dialogue with oil palm planters both in Sabah and Peninsular Malaysia to understand the problems and unhappiness faced by them. Implementing measures without any consultation is not only undemocratic but also unprofessional and would not inspire confidence in the competency of the government to make informed decisions.