Malaysia & Indonesia Protest France’s Progressive Palm Oil Tax

JAKARTA: Malaysia and Indonesia have protested France’s plan to impose progressive tax on palm-based products that enter the country to up to 900 euros (RM4,125) per tonne.

 

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Plantation Industries and Commodities Minister Datuk Seri Douglas Uggah Embas said France’s unreasonable tax that would be implemented from next year clearly intended to kill the palm oil industry.

 

He said this at a press conference together with Indonesian Coordinating Minister of Maritime and Resources, Rizal Ramli, after the Council of Palm Oil Producing Countries’ (CPOPC) meeting in Jakarta on Thursday.

 

Uggah said Malaysia and Indonesia understood the action by France which was possibly intended to safeguard the vegetable, soya and sunflower oil industry which were competing with palm oil, but the unreasonable tax violated the requirements of the World Trade Organisation (WTO).

 

He said the move to kill the palm oil industry had affected millions of Indonesians and Malaysians working and involved in the industry.

 

Rizal said the implementation of the additional tax beginning next year made no sense and France has no strong reason to do so.

 

“The tax increase is malicious and intends to kill the palm oil industry in both countries as the selling price of palm oil is only 550 euros (RM2,520) per tonne while the tax to be imposed is more than 500 euros (RM2,291) per tonne,” he said.

 

“Although France is a small market for Malaysia and Indonesia, the country’s move to increase the palm oil import tax can influence other countries to follow,” he said.

 

On Jan 21, the French Parliament approved a Bill that would raise the import tax of palm oil from 100 euros per tonne to 300 euros from 2017, 500 euros per tonne from 2018, 700 euros per tonne from 2019 and eventually up to 900 euros per tonne. 

 

Asked whether the palm oil tax issue would affect Malaysia-France ties, he said it could hurt relations between the two countries. 

 

“Of course, we will have problems with France if they were to impose the unreasonable tax and kill our industry,” he said. 

 

Earlier, the ministers had bilateral meeting to discuss matters relating to the palm oil industry and signed a plaque on the launch of the CPOPC.

 

At the meeting, Rizal also announced the appointment of Director-General of Indonesia’s Industry Ministry, Benny Wachjudi, as executive-director of CPOPC and two directors each from Malaysia and Indonesia.