Govt may reassess SST on imported fruits, DPM says

The government may reevaluate the planned imposition of a five percent sales and service tax (SST) on imported fruits, said Deputy Prime Minister Ahmad Zahid Hamidi.
Highlighting that fruits such as apples and mandarin oranges are exclusively imported, he reportedly said the proposal to tax such items should be reconsidered.

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KUALA LUMPUR: The government today clarified that refined sugar will remain exempt from the revised Sales and Service Tax (SST) and that manufacturers can apply for exemptions on raw sugar inputs, addressing concerns over potential price hikes. In a statement, the Finance Ministry reiterated that the revised SST, which takes effect next month, imposes a five per cent tax on raw sugar, a material used in the production of refined or white sugar, but not on the finished product itself. "Refined sugar, or commonly known as white sugar, remains untaxed under the revised SST," the ministry said, responding to a statement by MSM Malaysia Holdings Bhd on the tax changes. The ministry also highlighted the government's targeted approach in excluding essential goods from the new tax structure, including sugar, salt, chicken, eggs, meat, fish, vegetables, cooking oil and rice. "This is to ensure that the majority of Malaysians are not affected by the revisions to the SST," it said. While raw sugar will be taxed, the ministry pointed out that manufacturers, including MSM, are eligible to apply for exemptions through the Customs Department. "Refiners and manufacturers of sugar in Malaysia can seek exemption on their upstream input costs by applying for a sales tax exemption on raw material inputs," it said, citing provisions under the Sales Tax (Persons Exempted from Payment of Tax) Order. The ministry also noted that MSM and other sugar refiners continue to receive monthly incentives from the government to support price and supply stability in the market. "Therefore, there should not be any increase in prices of refined sugar," it added. The clarification comes amid concerns that the new SST regime could drive up refined sugar prices and pass costs on to consumers. On Thursday, MSM said the new levy on raw sugar under the expanded SST has raised concerns about a potential increase in refined sugar prices. The country's largest sugar producer said it has sought clarification from the government, citing the tax as a significant cost pressure. The five per cent sales tax on raw sugar is set to take effect on July 1, as part of a broader initiative under the 2025 Budget to widen the tax base and raise government revenue.

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[UPDATED] Anwar: GST on hold as Malaysians still can't afford it

PUTRAJAYA: The government will not reintroduce the Goods and Services Tax (GST) for now, as the income threshold of many Malaysians remains too low, Prime Minister Datuk Seri Anwar Ibrahim said. Anwar, who is also Finance Minister, said that while GST is an efficient and transparent tax system, it would be inappropriate to implement it when lower‑income groups — especially those earning around RM2,000 — are not yet in a position to bear the burden. "When I was Finance Minister, I remember saying in Parliament that GST is one of the most efficient and transparent tax systems. However, I had to postpone its implementation because the income threshold of the people at the time was too low. "Although some might consider it a fair approach, many low‑income earners would still be impacted despite certain exemptions. "Even if we exempt essentials such as rice and sugar, these same people still have to spend on other goods and services, including transportation. GST affects every part of their daily lives," he said during the Finance Ministry's monthly assembly here today. He added that GST would only be reconsidered when salaries have risen closer to a more sustainable level, citing RM4,000 as a potential threshold for the future. "Let people's incomes rise first. Perhaps when the minimum wage is RM4,000, we can consider it. At the moment, many are earning RM1,700 or RM2,000. "Maybe I am not making the wisest decision, but my intention is simple — I do not want to introduce a tax that will burden the people prematurely. "Until incomes rise, it would not be right for the government to impose a tax that adds to the people's struggles. Let incomes grow first — then, perhaps, GST can be revisited," he said. The government had earlier announced a targeted review of sales tax rates and an expansion of the scope of the Sales and Services Tax (SST), which will take effect from July 1. The sales tax rate will remain unchanged for essential goods, while a rate of five or ten per cent will apply to non‑essential goods or at the government's discretion. Anwar added that if any party had better suggestions for tax implementation, these could be discussed openly, but he urged critics to refrain from disparaging the existing SST, which he said was introduced progressively. For example, he said, the decision to impose tax on imported fruit — which has become a controversial issue — in fact provides an opportunity for local farmers to produce more fruit domestically. "During my official trips to countries such as Laos, Vietnam and Thailand, I have never been served imported products at formal state events. They ensure that only local produce is served." He said beyond tax policies, the government must also focus on supporting local farmers, entrepreneurs and suppliers. "We have issued a directive for all departments and ministries to prioritise local produce and reduce reliance on imports. "Why import expensive items like codfish when we have quality local fish such as keli (catfish)? Let us use government procurement to benefit our own farmers and fishermen."