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SOS call on exemption import duty tax for farm machineries

Monday, 4 November 2019

Palm oil industry in Sarawak request urgent action by Ministries involved

The Sarawak Oil Palm Plantation Owners Association (SOPPOA) is requesting for the Finance Ministry to urgently look into the matter of tax duties for import of farm machineries used for infield activities in plantations in Sarawak. Currently, following the requests from the Ministry of Plantation Industry and Human Resource Ministry to reduce number of foreign workers in the palm oil industry, many estates have decided to deploy more agricultural machineries to do the work of these workers, hence resulting in the import of such agricultural machines from various countries. Unfortunately, and to the dismay of the palm oil industry here, such agricultural machines are recently subjected to a 10% sales tax plus a 30% import duty for those with import Approved Permit (AP) by the Customs Department which greatly negatively impacted on the companies’ finances importing these machines.

“The palm oil industry in Sarawak is embarking on a transformation process to reduce number of foreign workers needed in the industry by using more agricultural machineries for FFB (Fresh Fruit Bunches) collection, fertilizer spreader, chemical sprayer and other oil palm estates related works in line with the calls by the Ministry of Plantation Industries and also Human Resource Ministry to do so. However, we are shocked by the duty taxes of 30% and 10% imposed by the Customs Department which have dire consequences on the plantation companies’ finances. We request for the urgent intervention by the Finance Ministry to exempt these duties taxes for on the importation of machines for infield work in plantation companies so that we can work towards fulfilling the nation’s objective of reducing the dependency of foreign workers in the industry,” said SOPPOA.

The Federal Government need to streamline its objectives in this initiative with the various Ministries working in harmony with the private sector to enhance higher work productivity through mechanization and automation, a much needed in technology transformation in the plantation sector. As the palm oil industry being a major revenue contributor to the nation, SOPPOA request for the Ministries to urgently look into the matter of exempting import duties and taxes on all imported machineries deployed for estate infield work. Some of these agricultural machines are only available from other countries and plantation companies are trying to accomplish the objectives of reducing number of foreign workers through mechanization and improving work productivity. However, with the current high import duties imposed for these machines, it is counterproductive for companies to buy them at such high cost and to recover their capital outlay for longer period of time.

SOPPOA is making an SOS call to the various Federal Ministries to look urgently into this matter and to exempt import duties for agricultural machines for infield use in oil palm estates.