16/05/2008 (The Edge Daily), Kuala Lumpur - The government is reviewing the implementation of the Cooking Oil Subsidy Scheme (COSS), and is considering the possibility of returning the special cess collected under the scheme in the form of tax rebate to oil palm planters.
Summing up the debate on the motion of thanks on the royal address yesterday, Minister of Plantations and Commodity Industries Datuk Peter Chin Fah Kui said his ministry was still studying the future direction of COSS.
“The study includes lowering cess and ensuring the lower income group is not burdened by high cooking oil prices. It will take time for the government to consider this matter,” he added.
Chin said the government had collected RM1.37 billion in the form of the special cess from oil palm planters between June 2007 and April 2008 under the scheme.
The special cess, however, is collected only from oil palm plantations exceeding 40.46ha (100 acres).
Since the tax is collected according to plantation size, Sabah is naturally the largest contributor of cess with RM546.87 million, while only RM1.83 million came from Penang during this period.
“From this amount (RM1.37 billion), the subsidy paid (for cooking oil) from June 2007 and April 2008 was RM970.4 million, leaving a balance of RM397.4 million,” Chin said.
The oil palm industry has been trying to push for the abolition of the cess, which was imposed by the government to subsidise the price of cooking oil imposed since June 2007 following a hike in crude palm oil (CPO) price.
However, certain plantation companies with low CPO yield and smallholders are unhappy with the move as they are required to pay two existing cess.
On top of the special cess under COSS, oil palm planters are already paying a cess of about RM4 per tonne of CPO to the Malaysian Palm Oil Board (MPOB) for the CPO price stabilisation fund since 2001 when the commodity price fell below RM600 per tonne.
Industry players have also been paying a cess of about RM11 per tonne of CPO to MPOB for its research work for the past 20 years.
In his speech, Chin also highlighted that his ministry was very concerned about the welfare of plantation workers in the oil palm sub-sector.
He said all employers were compelled to provide basic amenities for their workers under the Worker’s Minimum Standards of Housing and Amenities Act 1990, enforced by the human resources ministry.
“My ministry also encouraged plantation companies to implement their corporate social responsibilities (CSR), particularly for their own workers.
“In relation to this, several large plantation companies have given a commitment to implement programmes to improve welfare, amenities and infrastructure in their plantations for a five-year period from 2008 to 2012 involving an allocation of about RM1 billion,” he said.
Chin also responded to a query from Dr Jeyakumar Devaraj (Sungai Siput-PKR), who highlighted that some large plantation companies had been suppressing the wages of local plantation workers by using foreign labour.
He said his ministry was aware of the issue of foreign workers and had been calling for a mechanisation scheme in the plantations as well as for a skill upgrade of local workers.
“This way, they (local workers) would not end up as petty labourers and could lower the need for foreign workers in the plantations,” he added.
According to him, local workers would get better wages if they could upgrade their skills by becoming mechanics or machine operators in the plantations.