Margma urges review of SST on glove raw materials
KUALA LUMPUR: The Malaysian Rubber Glove Manufacturers Association (Margma) has called on the government to defer and review the five per cent sales and service tax (SST) on natural rubber latex and nitrile butadiene rubber latex raw materials.
In a statement, Margma said the tax will immediately raise production costs, especially for manufacturers with existing forward contracts, who cannot pass on the cost to buyers due to stiff global competition.
"This added cost will erode already thin margins, reduce cash flow for reinvestment, and further weaken Malaysia's position in a market increasingly led by lower-cost producers," it said.
Malaysia's rubber glove industry generated RM15.41 billion in export revenue last year and supports over 78,000 direct jobs, making it the largest contributor to total rubber product exports.
Margma warned the expanded SST could create a ripple effect across the supply chain, increasing costs for upstream latex processors and chemical suppliers, and straining working capital for downstream manufacturers, many of which are small and medium enterprises.
"This could hamper job creation, stall automation efforts, and threaten Malaysia's ambition to remain a global hub for high-value glove production," it said.
While supporting the government's goal of diversifying revenue, Margma said taxation should not jeopardise a key export sector that delivers strong foreign exchange earnings and high-quality employment.
It urged a "calibrated approach" including a postponement of the SST rollout, a comprehensive cost-benefit study involving industry stakeholders, and targeted exemptions or zero-rating of critical raw materials.
Margma reaffirmed its willingness to work with the government on a balanced solution that aligns with fiscal objectives while safeguarding the industry's global competitiveness.
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