More Incentives Sought by Forest Sector
11/12/97
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Headline: More Incentives Sought by Forest Sector
Source: The Star
Date: 11/12/97
Author: Jack Wong
Copyright 1997 Star Publications
KUCHING: Additional incentives should be explored to
enhance the private sector's investment in forest
plantation development, an international pulp and paper
conference in Kuching was told yesterday.
Forestry director-general Datuk Hashim Saad said the
existing incentives announced three years ago were the
pioneer status and investment tax allowance (ITA).
The pioneer status is in the form of 100% exemption from
income tax for up to 10 years, starting from the first
harvest date while the ITA is at the rate of 100% of the
qualifying capital expenditure incurred within five
years from the date of the first qualifying expenditure
is incurred.
He said despite the early keen interests shown by
private sector in forest plantation development, little
had been achieved.
"This is not very surprising since forest plantation
establishment is a high capital and high risk investment
with many constraints still being faced by the
prospective investors," he added in a paper Forest
plantation development in Peninsular Malaysia --
experiences and future outlook.
Hashim said the constraints included land availability,
high capital investment, long gestation period and an
information gap.
He said a joint study carried out by the Malaysian
Timber Council, Forestry Department in the peninsula,
Sabah and Sarawak as well as Forest Research Institute
of Malaysia last year could only identify 2.82 million
ha potential state land that could be considered for
future forest plantation development -- out of which
1.53 million ha are in Sarawak, 920,000ha in Sabah and
370,000ha in the peninsula.
He said the potential land in the peninsula were
scattered in small fragments, therefore making them
uneconomical for large scale development.
Hashim said a more concerted and coordinated effort in
research and development was needed to provide technical
guidance to the investors.
Such guidance would include the choice of tree species,
site suitability, management and silviculture regimes,
pest and disease control as well as the production of
quality planting materials.