Malaysia: Higher CPO export tax to encourage local downstream refining

Published Oct 22, 2024

Tridge summary

The Malaysian government is revising its export tax on crude palm oil (CPO) starting November 1, increasing the ceiling to 10% for prices above RM4,050 per tonne and adding new tax brackets for lower prices. This change aims to boost domestic refining activities by encouraging more CPO processing within Malaysia, thereby reducing crude exports and enhancing the creation of value-added products. The revision comes after Indonesia lowered its CPO export levy to a fixed 7.5%, which remains higher than Malaysia's rates. The new tax structure is expected to benefit Malaysia's downstream sector by retaining more CPO for local refining.

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Original content

KUALA LUMPUR (Oct 22): The recent announcement to revise the export tax on crude palm oil (CPO) is aimed at enhancing downstream refining operations in Malaysia's palm oil industry, Minister of Plantations and Commodities Datuk Seri Johari Abdul Ghani said. "The increase in the export tax for crude palm oil is to enhance more downstream [activities], allowing us to create value-added products right here in our country. "Instead of exporting CPO, we want to process it domestically," Johari told reporters at the Oils and Fats International Congress 2024, an event organised by the Malaysian Oil Scientists and Technologists Association. During the Budget 2025 presentation last Friday, Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim announced plans to raise the ceiling on the CPO export tax structure, effective Nov 1. Under the proposed changes, the ceiling will increase to 10% for prices exceeding RM4,050 per tonne, with additional brackets of 9.5% (for prices between ...

Source: Theedgemarkets