Forest plantation licencees who need the Government’s help to fund their projects have been told to submit their specific requests.
Deputy Finance Minister Datuk Donald Lim said the Federal Government would consider their requests such as soft loans.
“They have to tell us,” he said after being briefed on Sarawak’s achievements in the implementation of forest plantation projects during a dialogue on tax incentives for forest plantation development with the Sarawak Timber Association (STA) here recently.
Lim said the Government would support such projects to relieve the pressure of harvesting timber from natural forests. The ministry gave out some RM200mil in soft loans for the establishment of 75,000ha of plantations about four years ago.
He said Malaysia had made slow progress in its re-forestation programme through the establishment of forest plantations.
“The target is very far off,” he revealed, and urged commercial banks to also lend a helping hand in providing funds.
Lim said 17 of the 43 forest plantation licencees in Sarawak had received cash incentives from the Federal Government.
Besides Sarawak, forest plantation projects have been planned for Sabah, Pahang, Terengganu and Johore. There are no figures on the total area of forest plantations in the peninsula and Sabah.
For Sarawak, Lim said the state government’s target was to reforest 1.3mil ha (of nett plantable area) by planting fast growing commercial timber species by 2020.
Out of the 1.3mil ha, only 262,000 ha or 20.1% have been planted by both the private and public sectors, according to STA tax incentives for planted forest development working committee chairman Philip Choo.
“The private sector so far managed to establish only 147,000ha or 12.8% of the allocated 1.15mil ha,” he said.
The earliest forest plantations in Bintulu, which were developed in the 1990s, have matured. These plantations were supposed to supply raw materials to a proposed pulp and paper mill project but the project has yet to take off although it was planned more than 15 years ago.
Choo, also STA treasurer, cited a lack of funding as one of the reasons for the slow implementation of forest plantation projects.
He said based on the establishment cost of RM6,000/ha of forest plantation, it would need RM6.9bil to plant 1.3 million ha.
“As another 87.2% of the allocated area have not been planted,the private sector still requires about RM6bil in funding,” he said.
On the Income Tax (Exemption) (No.10) Order 2009 which expires in December this year, Lim said he had asked the association to write to the Plantation Industries and Commodities Ministry if it wanted an extension. Under the order, new tax incentives are given for planted forest development.
The order, together with the Income Tax (Deduction for investment in an approved forest plantation project) Rules, 2009,were issued on Nov 23,2009 and backdated to May 21,2003.
Choo has the incentives,which were tailored for approved forest plantation projects covering both the planting and harvest periods, would accelerate planting activities.
