Traders seek clarity as SST casts shadow over imported fruits

New Straits Times

a day ago

ALOR STAR: Will the prices of imported apples, oranges, lemons and grapes rise next month?
This is the question weighing on the minds of fruit traders and suppliers following the government's move to expand the Sales and Service Tax (SST) to include imported fruits, effective July 1, 2025.
"We hope the government will exempt commonly purchased imported fruits such as apples, grapes and oranges, which are staples for many of our B40 and M40 customers.
"My immediate concern is that the expanded SST will disproportionately affect lower- and middle-income consumers," said Azim Roslan, a fruit wholesaler and retailer based in Tikam Batu, Sungai Petani.
He said many traders sourced imported fruits from neighbouring countries such as Thailand and Indonesia to meet local demand, especially during the off-season for Malaysian produce.
"Currently, we've scaled back our orders of imported fruits due to the ongoing durian and local fruit season. We're hoping the government will clarify which specific fruits will fall under the SST scope," he told the New Straits Times.
Suppliers and traders in Alor Star's popular Pekan Buah area echoed similar concerns, particularly over the lack of clarity surrounding the tax implementation.
"If SST is applied across the board to all imported fruits, I worry demand will be affected. Most of our customers are from low- and middle-income households," said one trader who declined to be named.
Another trader, also speaking on condition of anonymity, said over half her stock comprised imported fruits.
"These oranges, apples, grapes and lemons are all imported. We simply can't source them locally. If they're taxed, I'll have no choice but to pass the cost on to consumers," she said.
Consumer Association of Kedah (Cake) president Yusrizal Yusoff said the government must issue clear guidelines on the SST expansion.
"While Cake supports SST on premium food items such as salmon, avocado and king crab, we believe fruits commonly consumed by the public should be exempt.
"These fruits are essential sources of nutrients and fibre. It's important they remain affordable to the wider population," he said.
Yusrizal said that 70 to 80 per cent of commonly consumed imported fruits came from neighbouring countries and China.
"In fact, we're even importing coconuts to produce coconut milk due to local shortages. Will SST apply to imported coconuts as well? These are the types of questions that require clear answers," he added.
On Monday, the Finance Ministry announced that revised SST rates outlined under Budget 2025 would come into effect on July 1.
The ministry said the measure is aimed at strengthening the country's fiscal position by increasing revenue and broadening the tax base.
Under the revised structure, selected non-essential and luxury goods will be taxed at rates between 5 and 10 per cent.
Essential items — including rice, cooking oil, bread, sugar, local fruits and medicines — will remain exempt. However, discretionary items such as imported fruits, king crab, truffle mushrooms and racing bicycles will now be subject to the new levy.
Additionally, services in six key sectors — rental and leasing, construction, financial services, private healthcare, education and beauty — will be taxed at rates ranging from 6 to 8 per cent, depending on the nature of the service and revenue generated.