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

Businesses operating in shipping and petroleum sectors are suffering due to uncertainty over how the tax is applied to oil cargo that is mixed together at Johor’s Tanjung Langsat Port, according to Datuk Seri Jeyenderan Ramasamy, the CEO of Maritime Network Sdn Bhd. The Royal Malaysian Customs Department must swiftly give a clear decision on whether this practice is acceptable and, if yes, how the cargo should be categorized, documented, and assessed for tax purposes.

With over three decades of maritime experience, Jeyenderan highlighted the significance of the matter at Tanjung Langsat Port, where petroleum cargo is handled and may be discharged from ships into shore tanks during transshipment operations. When various shipments are combined in a shore tank, Customs must ascertain whether the commingling is accurate and how the cargo should be treated for tax purposes.

To prevent businesses from facing confusion, additional expenses, and potential disputes with authorities, Customs must establish clear guidelines on documentation, cargo classification, valuation, and tax assessment. If the practice is permitted, Customs must explicitly outline the necessary requirements, including tax calculations.

If the cargo is not taxable according to the rules, that must also be explicitly stated. Prolonged uncertainty could lead to cargo delays, increased storage and operational costs, contractual problems, and disruption to business activities at the port. Jeyenderan urged customs to collaborate directly with industry professionals to better comprehend the operations involving petroleum cargo at Tanjung Langsat Port, especially procedures that occur after vessel discharge and during storage and transshipment.