Margma urges govt to rethink imposition of 5% SST on rubber glove raw materials
PETALING JAYA: The Malaysian Rubber Glove Manufacturers Association (Margma) is urging the government to defer and review the imposition of 5% Sales and Service Tax (SST) on natural rubber latex and nitrile butadiene rubber latex raw materials.
In a statement today, Margma said the rubber glove industry is Malaysia's largest export contributor to total rubber product exports, generating RM15.41 billion in export revenue last year and supporting more than 78,000 direct jobs.
Margma said applying SST to essential raw materials will immediately raise production costs.
For companies that have already secured forward sales, absorbing these sudden additional costs will prove unfeasible, the association added.
Margma said that at a time when global glove prices remain highly competitive, the added cost cannot be passed on to overseas buyers; instead, it will erode already thin margins, reduce cash flow for reinvestment and further weaken Malaysia's share in a market now dominated by lower-cost producers.
Beyond direct cost escalation, it said, the expanded SST risks causing a cascading effect on the entire domestic rubber ecosystem.
'Upstream latex processors and chemical suppliers will face higher operating expenses, while downstream medical-device and industrial-glove manufacturers – many of them SMEs will feel the squeeze on working capital. This could slow job creation, deter future automation projects and jeopardise Malaysia's strategic ambition to remain a global centre for high-value glove production,' said the association.
Margma said it fully supports the government's broader revenue diversification agenda, but believes that taxation policy should not undermine a sector that has consistently delivered foreign exchange, high-quality employment and substantial upstream linkages.
'We therefore echo similar appeals by other associations for a calibrated approach: postpone the implementation date, conduct a thorough cost-benefit study with industry participation and consider targeted exemptions or zero-rating for critical raw materials where export competitiveness is at stake.'
Margma said it stands ready to collaborate with the Ministry of Finance, the Royal Malaysian Customs Department and all relevant agencies to craft a balanced solution that safeguards fiscal objectives while preserving Malaysia's leadership in the global rubber glove value chain.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Malaysiakini
21 minutes ago
- Malaysiakini
Mydin boss slams SST on imported fruits, calls for exemption
Mydin Mohamed Holdings Bhd managing director Ameer Ali Mydin criticised the government's move to impose the sales and service tax (SST) on imported fruits, calling it 'nonsensical.' Ameer argued that, contrary to popular belief, some imported fruits are also consumed by low-income groups and should be considered essential food items.
The Star
43 minutes ago
- The Star
Other ways to increase government funds
RATHER than expanding the sales and service tax (SST), the government should consider reaching an agreement with our Asean neighbours to collectively and gradually increase corporate tax on foreign direct investors (FDI) as well as the wealth tax on the T20 (top 20% income earners) in our respective countries. Imposing such taxes is far more effective than expanding the SST, which will only worsen the socioeconomic status of the B40 (low income) and M40 (middle income) groups one way or the other.
The Star
an hour ago
- The Star
Hairdressers in the dark over expanded SST rules
Grooming in progress: A traditional indian barber attending to a customer in Kepala Batas, Penang. — ZHAFARAN NASIB/The Star BUTTERWORTH: Barbers and hair salon operators here are in the dark over the expanded Sales and Service Tax (SST), with some raising concerns over compliance and potential cost implications upon its implementation. Barbershop operator Rashidan Wan Hamid, 56, only learned about the expanded SST through news reports and conversations with industry peers. He said business operating costs would be affected if barbershops were subject to the expanded tax. ALSO READ: It's an unkind cut, say hairdressers 'I foresee an impact on both my services and expenses. If the service tax is imposed, we will have to reassess everything, from pricing to profit margins. 'Naturally, business will slow down if prices go up because customers may cut back on grooming services,' he said, adding that any form of taxation will inevitably affect small traders. Rashidan urged the government to review the implementation and consider postponing it until the economy improves. Barbershop owner Muhammad Zulfaqaruddin Mohd Shaiful, 22, said he was unsure how the expanded SST would affect the industry. He said there was a lack of clarity on how the tax would be applied and whether barbershops like his would fall under its scope. 'If the tax is imposed, it will impact my operations and service pricing,' he said, adding that rising costs could affect customer retention. As a young entrepreneur still building his customer base, Muhammad Zulfaqaruddin said affordability is key to retaining clients in a competitive market. He added that barbershops often operate on thin profit margins, and absorbing the additional cost could make it harder for smaller operators like him to stay competitive. For now, he will run his business as usual and follow any instructions from the government regarding the SST. Female Muslim spa and hair salon operator Aufa Insyirah Mohamad Halimi, 25, said her business has yet to receive any instructions regarding the imposition of SST. 'At the moment, we are operating as usual. I am uncertain whether my business falls under the expanded tax category,' she said. However, Aufa Insyirah said that if her business is required to comply, service prices would likely change based on the total value of treatments customers receive. 'Service prices won't be increased unless there is a rise in material costs or a revision of the minimum wage,' she added. The reviewed and expanded SST rates, as announced in Budget 2025, will come into effect on July 1. The Finance Ministry said in a statement on June 9 that the measure is to strengthen the country's fiscal position by increasing revenue and broadening the tax base. The existing tax scope will be expanded to cover six types of services: rental or leasing, construction work, financial, private healthcare, education and beauty.
