11 hours ago
‘No replacing apples with cucumbers'
Sounding the alarm: Low (seated, fourth from right) with Chin (fourth from left) posing for a photograph at the press conference on SST at Wisma MCA in Kuala Lumpur. – AZMAN GHANI/The Star
KUALA LUMPUR: Consumers may have to pay much more for imported fruits with the expanded Sales and Service Tax (SST) kicking in on July 1, traders said.
Kuala Lumpur Fruit Wholesalers' Association president Chin Nyuk Moy said importers faced a double whammy with the 5% SST on imported fruits and 30% increase in freight charges in Port Klang, not to mention the possibility of an electricity tariff hike.
She said many imported fruits were already subject to duties ranging from 5% to 30%, depending on their countries of origin and type.
'Fruits from countries like Thailand, South Africa and the United States already incur import taxes.
'With all these layered costs, we can't imagine how much apples, oranges, pears and grapes will cost after July 1,' she told a press conference at Wisma MCA here yesterday.
Chin said cold storage costs were also rising sharply, citing her facility's RM60,000 monthly power bill.
'SST applies to transport and electricity tariffs too. That's a huge burden for wholesalers.
'Fruits are not a luxury, they are essentials. Vegetables are exempt from SST, and fruits should be too. You can't replace apples with cucumbers,' she argued.
Chin said even once-premium fruits such as avocados were now commonly found in supermarkets.
She said it remained unclear how consumers will respond to the SST imposition.
'If people start cutting back, we will be forced to reduce imports. Margins are already razor-thin, and operating costs keep rising,' she said.
Chin said while importers looked to source fruits from more affordable countries, global supply remained constrained.
'Fruit farming is challenging. The US has cut back on exports, Australia is producing less, and exchange rates are unfavourable.
'Chinese apples that once cost RM50 to RM60 per box now go for RM100. For oranges, we have turned to Egypt and the Middle East for better value,' she said.
Northern Kuala Lumpur Traders Association president Ong Mok Hooi said small and medium-sized enterprises (SMEs) were already buckling under pressure.
'SMEs are the backbone of our economy. Imposing more costs now will only worsen the situation. If business continues to decline, how can we retain our workers?' he asked.
Fruit wholesaler Qkhiew Yoon Chin said fruits have already become unaffordable to many.
'We used to buy 3kg of mangoes for RM10. After last year's diesel hike, we get only 2kg.
'With the new 5% SST, it will be worse. Fruits were not taxed under the Goods and Services Tax (GST), but they are under SST,' he said.
He said traders are struggling with multiple compliance burdens including income tax, PERKESO payments, rising transport costs and implementing e-invoicing.
MCA vice-president Datuk Lawrence Low urged the government to withdraw the 5% tax on imported fruits and hold proper consultations with industry stakeholders.
'Fruits like apples, oranges, pears and grapes are part of the daily staple and are used in religious and cultural rituals too,' he added.
Low, who chairs the MCA's economic and SME affairs committee, said the move contradicted the government's policy of promoting healthy living, with many temperate fruits not grown locally.
He reiterated MCA's long-standing position that the SST should be replaced with a streamlined GST at a lower rate of 3%-4% to avoid cascading taxes and improve transparency.
'MCA will continue to act as a platform for the rakyat. We stand with those struggling under the rising cost of living and will keep voicing their concerns,' he added.
On June 9, the government announced a targeted review of the SST regime, effective July 1.
While the sales tax for essential goods remains unchanged, a 5% or 10% rate will apply to non-essential items.
