MCA urges government to drop 5% tax on imported fruits, calls for stakeholder consultation

The Star

4 hours ago

KUALA LUMPUR: The government should withdraw the 5% sales tax on imported fruits and engage stakeholders in consultations to assess the real impact of the tax expansion.
MCA vice-president Datuk Lawrence Low said the move to impose tax on imported fruits such as apples, oranges, pears and grapes widely consumed by Malaysians would place an unfair burden on consumers and small traders.
'These are not luxury items. Fruits are part of the daily diet for many families and are used in religious and cultural practices. Taxing them will raise costs at every level and directly impact the rakyat,' he said at a press conference on Monday (June 23).
Low said that while the government promotes healthy eating, taxing essential imported fruits sends a contradictory message, particularly as many of these fruits are not produced locally in sufficient quantities.
'We support the consumption of local produce, but Malaysia's climate doesn't allow for large-scale cultivation of temperate fruits. Apples and oranges, for example, remain staples in most households.'
Low, who is also the MCA's economic and SME affairs committee chairman, warned that from July 1, small businesses will face increased operational costs, including expansion on SST, a hike in freight charges at Port Klang, and higher electricity tariffs.
'This does not help SMEs. If retailers absorb the added cost, they will face high operating costs; if they pass it on, the consumer pays more. Either way, it adds pressure.'
'Small traders are already struggling to comply with e-invoicing and other regulatory requirements. This tax is like death by a thousand cuts — it's affecting their ability to survive,' he said.
Low highlighted that fruits such as apples and grapes are commonly used during festivals and ancestral prayers, while dates (kurma) hold cultural significance for the Malay community.
He stressed that such fruits are everyday essentials, not luxuries.
'There's a misconception that imported fruits are only for the wealthy. But they're part of our food culture — found in supermarkets and wet markets alike. Everyone, regardless of income, consumes them.'
He said MCA had received many calls from traders and the public expressing concern over rising costs and frustration with what they see as unfair taxation.
'This is not about rejecting taxation — it's about doing it wisely. The government must take a long-term view and avoid policies that erode public trust.'
Low reiterated MCA's call for the SST to be replaced with a streamlined Goods and Services Tax (GST) at a lower rate of 3% to 4%, to avoid cascading taxes and improve transparency.
'MCA will continue to be a voice for the people. We stand with those struggling under the rising cost of living and will keep conveying their concerns to the government,' he said.
On June 9, the government announced a targeted review of the SST rate, which will take effect from July 1. The sales tax rate will remain the same for essential goods, while a rate of 5% or 10% will be imposed on non-essential or discretionary goods.
At the same time, the scope of the service tax has also been expanded to cover six new services, namely rental or leasing, construction, finance, private healthcare, education and beauty.