company logo

Malaysia cuts CPO export tax

January 14, 2013

Malaysia will cut its export duty on crude palm oil (CPO) from 1st January in order to compete with Indonesia, which cut its export taxes in October 2011.

Malaysia will cut its export duty on crude palm oil (CPO) from 1st January in order to compete with Indonesia, which cut its export taxes in October 2011.
It is expected that Malaysia’s export duty on CPO will fluctuate monthly depending on world prices, from 4.5% if the CPO price is between Ringitt 2,250 (US$736)-Ringitt 2,400 (US$784) to 8.5% if prices reach Ringitt 3,400 (US$1,111). The current tax rate is 23%.

The sliding scale is directly comparable to the system in Indonesia, where the export duty on refined, bleached and deodorised (RBD) palm oil was cut from 23% to 10% in October 2011. The rate for RBD palm olein was cut from 25% to 13% and tax for CPO exports was set at 22.5%. Since the Indonesian move, Malaysia has suffered a reduction in its export shipments.


Plantation Industries and Commodities Minister Tan Sri Bernard Dompok, who made the announcement in October, confirmed that refined palm oil exports would remain tax free and that Malaysia would cancel its duty-free CPO‚Äąexport quota, which was set at five million tonnes, but was under-utilised last year. The delay in introducing the changes was to give the industry the chance to restructure. Dompok said the government hoped the changes would allow the sector to compete internationally and not be penalised in comparison with producers in other countries, and strengthen the domestic refining industry.


Related News