Finance Ministry: No reason for sugar price hike as refined sugar remains exempt from SST
KUALA LUMPUR, June 20 — Refined sugar (or commonly known as white sugar) remains tax-free under the revised Sales and Service Tax (SST) that will take effect on July 1, 2025, said the Ministry of Finance (MOF).
The MOF said in a statement today that raw sugar used in the production of refined sugar would be subject to a five per cent sales tax.
'However, as previously announced, manufacturers such as MSM Malaysia Holdings Bhd are eligible to apply for tax exemption on their raw materials and inputs.
'Hence, there is no reason for any increase in the price of refined sugar — especially since sugar refiners like MSM continue to receive monthly incentives from the government to ensure supply and price stability,' the MOF said.
The MOF said this to clarify a statement issued by MSM regarding the impact of the sales tax revision on raw sugar.
The ministry said the Madani Government has taken a targeted approach by not imposing taxes on essential goods such as sugar, salt, chicken, eggs, meat, fish, vegetables, cooking oil and rice.
'This is to ensure that the majority of the people will not be affected by the SST revision,' it said.
The MOF said sugar refiners and manufacturers in Malaysia can apply to the Royal Malaysian Customs Department for tax exemptions as provided for under Item 1, Column (2), Schedule B of the Sales Tax (Persons Exempt from Payment of Tax) Order.
Yesterday, it was reported that national refined sugar producer MSM is reviewing the five per cent extension of SST involving raw sugar and is seeking further clarification from the government to monitor the impact on the prices of regulated goods.
According to the MSM group chief executive officer, the retail price of sugar in Malaysia has been capped at RM2.85 per kilogramme since 2011, despite the global raw sugar price increasing in recent years.
He said that if the tax was imposed on raw sugar, the country's refined sugar producers could pass on the cost to the industry.
'However, we cannot do that for sugar because it is under price control,' he said, adding that 75 to 80 per cent of MSM's production costs come from raw sugar. — Bernama
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