QUESTION NO. 6:
Dr. S. Ramakrishnan ask Minister of Finance to state whether the government would impose a windfall tax for the purpose of mining companies to preserve the environment as a result of these activities or whether these companies have to provide some money to replace or conserve the natural environment for the sake of future generations. Particularly when prices of goods rise in international markets, they gain huge profit.
Y.B. SENATOR DATUK DR. AWANG ADEK HUSSEIN
DEPUTY MINISTER OF FINANCE
Windfall tax is a tax imposed on an industry that experienced profits or gains that are excessive. At this time, windfall tax is imposed on crude palm oil production when the price exceeds RM2,500 per tonne in Peninsular Malaysia and RM3,000 per tonne in Sabah and Sarawak.
At this time, the government has no plans to impose a windfall tax on the activities of mining or mining companies. This is due to mining activities is essential that the crude oil and natural gas at the upstream level. In addition, crude oil has declined from 690 thousand barrels per day in 2008 to 659 thousand barrels per day in 2009. Production is expected to be down again to 641 thousand barrels per day this year.
Companies that run petroleum crude oil exploration activities have been subject to petroleum income tax at a rate that is 38% higher compared to other companies that are imposed only at the rate of 25%. Therefore, the government should not impose a “windfall tax” in addition to the existing tax rate is high.
However, the government’s policy is to protect the environment. To this end, various tax incentives provided to companies providing energy conservation, using renewable energy resources, environmental management and on building green.