RM180 million loss after Putrajaya failed to tax bauxite miners, says Rafizi

Putrajaya decided to forego taxing bauxite miners in Kuantan despite firms enjoying a profit of 40% for every tonne of mineral, says an opposition lawmaker. – The Malaysian Insider pic by Afif Abd Halim, January 12, 2016.Putrajaya failed‎ to impose any export duties on bauxite mined in Kuantan, losing at least RM180 million in 2015 that could have been channelled back to the people to address pollution concerns caused by the industry, PKR’s Rafizi Ramli said today.

The PKR secretary-general said the Assignment of Export Duty (Mineral Ores) Act 1964‎ stated that the federal government must impose export duty on mineral ores (other than iron and tin), and that the state government could not impose royalty or similar charges.

But the Royal Customs Department’s website showed that no export duty was imposed on bauxite by the government, said Rafizi.

“Putrajaya decided to forego taxing such a lucrative industry‎, even though the bauxite companies reportedly earned a profit of 40% for every tonne of bauxite,” said Rafizi in a press conference in Petaling Jaya.

PKR secretary-general Rafizi Ramli says today the Royal Customs Department did not impose export duties on bauxite mined in Kuantan. – The Malaysian Insider pic by Seth Akmal, January 12, 2016.“Our position has always been to stop the bauxite mining. But with all the misery inflicted on the people in the vicinity, the government should at the very least collect the right amount of export duty to put back into community‎.

“That money is needed very much for Kuantan, Indera Mahkota and Paya Besar’s rehabilitation.”

He said Putrajaya should have collected 10% export duty, or RM360 million, from the RM3.6 billion bauxite exported in 2015.

He said 50% of the tax should have been channelled to the Pahang government, while the federal government should have pocketed the remainder, in accordance with the sct.

The act also stated that the Pahang government cannot collect royalty from bauxite mining, said Rafizi.

But, according to news reports, the state government earned RM47 million in royalty last year.

“I urge the Finance Ministry to look into these two matters. The first being that the federal government failed to impose export duty on bauxite, such as stated on the official website of the Royal Malaysian Customs.

“The second is because of the negligence, this has lead the federal government to lose RM180 million from bauxite export duties in 2015,” he said.

Last week, Natural Resources and Environment Minister Datuk Wan Junaidi Tuanku Jaafar said a three-month moratorium would be imposed on bauxite mining activities starting Friday, to deal with the pollution.

He said the freeze would be extended indefinitely if the industry failed to contain the problem within three months.

Wan Junaidi said he expected all bauxite stockpiles to be cleared and moved to an integrated stockpile centre within the three months, while new terms and conditions would be imposed for approved permits (APs).

The government would not be issuing new APs within the moratorium period unless the companies had existing contracts in the industry, he added.
He said companies that refused to clear their stockpiles within the moratorium period would have their APs withdrawn.

Since Kuantan ramped up its mining of bauxite for export to China last year, residents in the area have complained about pollution, caused by red dust from the mining activities and leakage from lorries transporting bauxite to Kuantan port.

It was reported that in the first 11 months of 2015, Malaysia exported more than 20 million tonnes of bauxite to China, up nearly 700% from the previous year. In 2013, it only shipped around 162,000 tonnes. – January 12, 2016.