Malaysia cuts rubberwood taxes, ends export limits
By Brian Carroll -- Furniture Today, February 17, 2002
KUALA LUMPUR, Malaysia — For the first time in a decade, Malaysia's furniture exports are falling, and the government is responding by cutting in half the tax on rubberwood and removing limits on how much a company can ship out.
Malaysia's tax will drop to 60 ringgit per cubic meter, or roughly $16, from 120 ringgit, and rubberwood quotas on furniture exporters will be dropped.
Rubberwood is indigenous to Malaysia and one of its best natural resources. The government regulates its harvesting, replenishment, use and export. An export tax and quota was imposed in 1990 to help protect the domestic supply. Now, the government is worried about a growing stockpile of the wood.
Datuk Seri Dr. Lim Keng Yaik, Malaysia's minister of primary industries, said the tax cut is meant to encourage furniture producers to export rubberwood to established markets.
"This move is made following the decline in our furniture exports last year, which I'm afraid will fall below ($1.3 billion)," Lim said in Kuala Lumpur, according to the Business Times of Malaysia.
In 2000, Malaysia reported furniture exports of about $1.5 billion. The slip in 2001 has been attributed by government officials primarily to the rise of China and the emergence of Vietnam.
Lim said there are some 60 exporters registered with the Malaysian Timber Industry Board, of which 15 are serious players.
"This move will discourage smuggling and spur local players to develop value-added rubberwood furniture and not be complacent in selling cheap sawn rubberwood to China and Thailand," he said.
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