SINGAPORE Dec 11 Malaysia will set a tax rate
for the export of crude palm oil for January by using the
average sales price from Nov. 10 to Dec. 9 as the reference
price, a government source said, a level that analysts said
could result in zero tax.
The new tax rate comes under a plan approved by the world's
second-largest palm oil producer in October to cut crude palm
oil (CPO) export taxes as it tries to claw back market share
from top producer Indonesia.
Under the new structure, January export taxes are likely be
set at zero, given that the average CPO price from Nov. 10 to
Dec. 9 fell below the lowest reference price of 2,250 ringgit
($740) per tonne, Maybank Investment Bank said in a research
note on Tuesday.
This would help Malaysian exporters ship as much CPO as
possible to reduce a record stockpile of 2.56 million tonnes in
The government will announce the tax levy on the 15th of
every month using Malaysian Palm Oil Board prices for reference
and will formalise the January tax in a gazette set to be issued
on Dec. 17, said the source, who declined to be identified
because he is not authorised to speak to the media.
Malaysian exporters have been concerned that the new tax
mechanism could spark a tax war with Indonesia, although the
world's largest palm oil producer said it was resisting pressure
to change its export tax system in response to Malaysia's
planned tax cuts, a junior minister said on Tuesday.
($1 = 3.0595 Malaysian ringgit)
(Reporting By Chew Yee Kiat; Editing by Jane Baird)