RM180 mln loss after Malaysia govt failed to tax bauxite miners, says Rafizi

Putrajaya, the third and latest Federal Territory of Malaysia, 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.

“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 further added 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.

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.

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.