MOF: Tax exemptions to prevent rise in refined sugar prices
KUALA LUMPUR: The government today clarified that refined sugar will remain exempt from the revised Sales and Service Tax (SST) and that manufacturers can apply for exemptions on raw sugar inputs, addressing concerns over potential price hikes.
In a statement, the Finance Ministry reiterated that the revised SST, which takes effect next month, imposes a five per cent tax on raw sugar, a material used in the production of refined or white sugar, but not on the finished product itself.
"Refined sugar, or commonly known as white sugar, remains untaxed under the revised SST," the ministry said, responding to a statement by MSM Malaysia Holdings Bhd on the tax changes.
The ministry also highlighted the government's targeted approach in excluding essential goods from the new tax structure, including sugar, salt, chicken, eggs, meat, fish, vegetables, cooking oil and rice.
"This is to ensure that the majority of Malaysians are not affected by the revisions to the SST," it said.
While raw sugar will be taxed, the ministry pointed out that manufacturers, including MSM, are eligible to apply for exemptions through the Customs Department.
"Refiners and manufacturers of sugar in Malaysia can seek exemption on their upstream input costs by applying for a sales tax exemption on raw material inputs," it said, citing provisions under the Sales Tax (Persons Exempted from Payment of Tax) Order.
The ministry also noted that MSM and other sugar refiners continue to receive monthly incentives from the government to support price and supply stability in the market.
"Therefore, there should not be any increase in prices of refined sugar," it added.
The clarification comes amid concerns that the new SST regime could drive up refined sugar prices and pass costs on to consumers.
On Thursday, MSM said the new levy on raw sugar under the expanded SST has raised concerns about a potential increase in refined sugar prices. The country's largest sugar producer said it has sought clarification from the government, citing the tax as a significant cost pressure.
The five per cent sales tax on raw sugar is set to take effect on July 1, as part of a broader initiative under the 2025 Budget to widen the tax base and raise government revenue.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Star
11 minutes ago
- The Star
SST on commercial rental will impact retail sector, says MRCA
PETALING JAYA: The Malaysian Retail Chain Association (MRCA) has called on the government to postpone the implementation of the 8% sales and service tax (SST) on rental and leasing services, due to come into effect on July 1. MRCA said while it recognises the government's intention to broaden the national tax base and enhance fiscal sustainability through targeted measures, extending SST to commercial rental presents considerable challenges to retailers operating physical outlets. ALSO READ: Expanded SST comes into effect July 1 "The additional cost burden comes at a time when many businesses are already contending with rising operational expenses, including minimum wage adjustments, stamping of employee contracts and heightened regulatory compliance," it said in a statement on Friday (June 20). "In the context of the supply chain from manufacturers and distributors to retailers, the increased cost of doing business is expected to translate into higher end prices for consumers," it added. ALSO READ: Expanded SST will add RM5bil to national coffers in 2025, RM10bil in 2026 MRCA said retailers across the board may find it increasingly difficult to absorb these additional expenses, particularly with a weaker consumer sentiment amid expectations of gradual government subsidy removal. MRCA said it will continue to engage with the Finance Ministry and relevant agencies to ensure that policy implementation remains balanced, transparent and conducive to the sustainable growth of the retail sector.
Daily Express
32 minutes ago
- Daily Express
No reason for price hike as refined sugar remains exempt from SST, Finance Ministry tells MSM
Published on: Friday, June 20, 2025 Published on: Fri, Jun 20, 2025 By: Bernama Text Size: Packets of sugar are stacked on shelves at a supermarket in Kuala Lumpur October 16, 2024. — Picture by Firdaus Latif Kuala Lumpur: 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. Advertisement '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. Advertisement '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. * Follow us on our official WhatsApp channel and Telegram for breaking news alerts and key updates! * Do you have access to the Daily Express e-paper and online exclusive news? Check out subscription plans available. Stay up-to-date by following Daily Express's Telegram channel. Daily Express Malaysia
Barnama
an hour ago
- Barnama
Zero Sales Tax On Local Fruits Will Strengthen National Economy
By Nor Farah Aqilah Mohd Sham and Siti Maisarah Abdul Ghani KUALA LUMPUR, June 20 (Bernama) -- The government's decision to maintain a zero Sales Tax for local fruits will not only encourage Malaysians to incorporate these agricultural products into their daily diet but will also be able to contribute to the national economy, according to experts. Deputy Dean of the Faculty of Plantation and Agrotechnology, Universiti Teknologi Mara (UiTM) Melaka branch, Jasin Campus, Associate Professor Dr Fazleen Abdul Fatah said this was because, aside from being highly nutritious, local fruits would remain reasonably priced and accessible to the public with the zero Sales Tax in place. "Local fruits such as papaya and mango are naturally very rich in various nutrients, including vitamins, minerals, enzymes, and fibre, which are good for addressing skin, cellular, and heart-related health issues. "The content of bioactive compounds found in local fruits is also able to act as natural antioxidants, boost the immune system, reduce the risk of cardiovascular disease, and many more," she told Bernama. According to Fazleen, local fruits will also be more easily available because these agricultural products do not need to go through a long transit period to be in the market, compared to imported fruits 'Purchasing local fruits can also help ensure the country's agricultural industry continues to grow and stabilise the food sector,' she said. A lecturer at the Department of Food Services Management, UiTM Puncak Alam, Selangor, Associate Professor Dr Zuraini Mat Issa@Zakaria, said Malaysia could reduce its dependence on imported fruits if the community prioritised local fruits 'In addition to the high costs of importing foreign fruits, it also contributes to a larger carbon footprint and environmental impact due to long transportation distances, high energy consumption for storage and packaging, and increased greenhouse gas emissions,' she said.
