a day ago
Manufacturing sector raises ‘triple blow' concerns
PETALING JAYA: A textile and apparel trade group has urged the government to engage with industry stakeholders to re-evaluate the tax scope of the expanded Sales and Service Tax (SST), which starts today.
Malaysian Knitting Manufacturers Association president Wayne Lian said this is to ensure the policy is sustainable and flexible.
He explained that the expanded SST will create a 'triple blow' to Malaysian businesses.
Lian said the detrimental effects would be due to rising costs, higher tax burdens and inflation.
He noted that the global geopolitical tensions have pushed up raw material and logistics costs, significantly compressing profit margins.
'However, beyond global instability, Malaysian businesses are also grappling with a series of domestic policy and cost burdens,' Lian said in a statement yesterday.
He added that the manufacturing sector is facing multiple challenges through several policies that could affect their financial stability.
'In recent months, manufacturers have faced multiple challenges, including the increase in minimum wage, diesel subsidy rationalisation, higher electricity and natural gas tariffs, implementation of the e-invoicing system, mandatory 2% EPF contributions for foreign workers, fluctuations in currency exchange rates, and rising raw material prices.
'These cumulative factors have substantially driven up operating expenses, placing unprecedented strain on businesses, particularly small and medium enterprises,' he said.
Lian also said that the tariffs imposed by the United States on a wide range of imported goods have disrupted the global trade flows and indirectly affected Malaysian businesses.
'At the same time, Malaysia is facing a surge in low-priced imports from China, as Chinese manufacturers, faced with overcapacity and global trade restrictions, are dumping products into regional markets.
'This practice is undercutting domestic industries and placing further pressure on local producers already struggling with tight margins,' he added.
