Maritime expert: Port businesses hit hard by uncertainty over commingled oil tax

The shipping and petroleum industries in Malaysia are grappling with significant challenges due to a lack of clarity surrounding the tax treatment of oil cargo commingled in shore tanks at Johor’s Tanjung Langsat Port, according to Datuk Seri Jeyenderan Ramasamy, CEO of Maritime Network Sdn Bhd. The Royal Malaysian Customs Department must swiftly issue a definitive ruling on the permissible nature of such commingling and establish guidelines on how cargo should be classified, documented, and assessed for tax purposes.

Jeyenderan, boasting over three decades of maritime experience, emphasized the critical importance of this issue at Tanjung Langsat Port, where petroleum cargo is frequently handled and discharged into shore tanks during transshipment operations. He warned that the absence of clear regulatory and tax guidelines could subject businesses to uncertainty, added expenses, and potential disputes with authorities.

When multiple consignments are mixed in a shore tank, Customs must determine whether the commingling is valid and how the cargo should be treated for tax purposes. Customs should provide clear requirements for documentation, cargo classification, valuation, and tax assessment to ensure businesses understand their obligations. Companies should not be left to independently interpret tax and customs regulations, especially when the consequences could be financially significant.

Jeyenderan stressed that ongoing uncertainty could lead to cargo delays, increased storage and operational costs, contractual complications, and disruptions to business activities at the port. He argued that legitimate companies should not be placed at a disadvantage due to unclear regulatory or tax requirements, asserting that businesses need clarity on what is permitted, required documentation, and the applicable tax treatment.

The expert also called on Customs to collaborate directly with industry participants to gain a deeper understanding of petroleum cargo operations at Tanjung Langsat Port, particularly procedures occurring post-vessel discharge and during storage and transshipment.