SINGAPORE, Dec 11 (Reuters) -
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 November.
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.
