KPK to hold engagement session with palm oil industry players on SST implementation
He said the purpose of this meeting is to address various concerns regarding the implementation of the Sales and Service Tax (SST), especially about the interpretation of final products.
'The session is important to ensure that all parties within the relevant sectors have a clearer understanding of the actual impact of SST on the supply chain and commodity production.
'They have engaged in discussions with the Ministry of Finance, but some issues remain unresolved. Therefore, the ministry has decided to intervene and assist stakeholders in gaining a clearer understanding of the actual situation they are facing on the ground,' Chan told Bernama after officiating the Food & Drinks Malaysia (FDM) 2025 exhibition here today.
Chan said the confusion surrounding the interpretation of final products stems from situations where products from one factory are used as raw materials by another party to produce various goods available in the market.
'The government has no intention of passing the cost on to consumers, but eventually it flows through the supply chain. So, we hope that SST is only imposed on the final product.
'However, problems arise when a so-called final product for one party becomes the raw material for another. So how do we define it?' he said.
Commenting on the Malaysian Rubber Glove Manufacturers Association's (MARGMA) proposal to postpone the implementation of the 5 per cent SST on natural rubber latex (NR) and nitrile butadiene rubber latex (NBR), Chan said no solution has been found yet, but the ministry welcomes any suggestions to help address the issue.
MARGMA cautioned that the implementation of the SST would have a cascading impact on the entire domestic rubber industry ecosystem, including affecting the cash flow of small and medium enterprises (SMEs), slowing down innovation, and undermining Malaysia's position as a global glove manufacturing hub.
Cocoa Industry Development
In his speech at the event, Chan said the world is currently facing a global shortage of cocoa beans, and the growing demand for sustainable and traceable cocoa is reshaping the industry — a challenge that Malaysia is ready to take on.
'We are now actively reviving cocoa plantation development, led by the Malaysian Cocoa Board, to boost land area and upstream bean production.
'This initiative is already underway, and we invite investors, cooperatives, and plantation players — both domestic and international — to join this national drive,' he said.
Chan noted that Malaysia is also shifting its focus to premium cocoa varieties, including fine-flavour beans, single-origin selections, and organic options to meet niche global demands and position Malaysian chocolate at the high end of the value chain.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Focus Malaysia
2 hours ago
- Focus Malaysia
Coherent SST reform requires zero exemptions for policymakers
THE Malaysian government's recent changes to the Sales and Service Tax (SST) are true to an at least decade-old tradition of self-defeating consumption tax policies. Raising taxes is a thankless but necessary task that requires astute policy design and nuanced messaging to manage both economic and political narratives. Both the 1 July changes and the case for them have left policymakers open to justifiable but needless criticism. Malaysian policymakers have long recognised the need to significantly increase revenue collections but have struggled to convince Malaysians. Tax reforms repeatedly adopt a narrow, small-target strategy that—by lacking both vision and tangible economic sustainability and equity objectives—instead become lightning rods for critics. Malaysians worried about their household budgets naturally fear higher taxes and do not count fiscal sustainability among their chief concerns. Making the case for consumption tax reform needs and deserves better than pointing to unsustainable budget deficits and delivering patronising rebukes of SST critics. It requires a consistent, coherent and non-condescending narrative that garners public support for changes that will improve not threaten their livelihoods. Policymakers should be explaining the importance of taxing consumption, how it supports a tax strategy that balances fairness, competitiveness and sustainably, and how the money raised will be used to benefit Malaysians. Consumption taxes have advantages that are especially relevant to Malaysia's circumstances. Malaysia has a large visiting and undocumented population whose income cannot be taxed but whose consumption can be. It has a sizeable informal sector contributing around a quarter of gross domestic product, whose income likewise escapes direct taxes but whose inputs may be partially captured by consumption levies. Shaping consumption choices through price signals will be essential to making Malaysia's future economic development less carbon intensive and more sustainable. Consumption taxes progressed alone cannot address Malaysia's revenue needs or be implemented equitably. Consumption taxes are regressive as low-income households consume more of their disposable incomes and therefore experience a greater relative impact. Attempts to neutralise these impacts by exempting or setting to zero the rate for basic goods introduces complexity for businesses and consumers, exempts rich and non-Malaysian consumers at the same time, and opens policymakers to arguments of inconsistency or bias. Accompanying changes to income taxes, transfers or welfare for low-income households would be a superior approach. Malaysians would be more receptive to tax hikes if their purpose were more tangibly linked to spending for their benefit. Public wariness remains high in the shadow of 1MDB and other newsworthy examples of funds being misused, with the government's fiscal challenges explicitly associated with corruption. At the same time Malaysians want better schools and hospitals, greater access to safe and efficient transport and technology, more generous social welfare and more. Transparent and well communicated spending intentions are an essential enabler of tax reform. The SST reforms have thus far been mapped poorly in these regards. Far from presenting a coherent vision for equitably, efficiently and sustainably raising revenue to spend in the interests of Malaysians, the reforms adopt a piecemeal and discriminatory approach to taxation. Two particularly concerning elements that have attracted fair criticism are the inclusion of basic goods and differential rates for local and imported goods. Malaysia is a net importer of food including many staple products, with openness to trade a critical contributor to food security both at the household and national levels. SST increases that represent an implicit import tariff, especially on basic and healthy goods like fruit, send precisely the wrong signal at a time when Malaysia is trying to counter global economic policy uncertainty. Malaysia must reinforce its openness to trade and investment by avoiding discriminatory taxes on overseas goods. Bowing to public backlash to provide post-announcement tax exemptions for imported apples and oranges (among other changes) further illustrates the policy development and communication shortcomings. Policymakers were either unaware of or misread public sensitivity on the price and availability of basic food imports, and in the absence of a compelling defence for the proposed SST increase were forced to make concessions. Evident is both a need for wider consultation and that complex and subjective tax design leaves policymakers exposed. Making the case for tax reform in Malaysia should also stick to message not mechanism. Long-running arguments comparing the SST with a restored GST are of greater distraction than consequence to the current debate. Either mechanism can be tailored to achieve comparable coverage and revenue outcomes, and tax incidence (who ultimately pays: consumers or producers) is determined by markets not tax design. Differences in administrative efficiency and effectiveness are important considerations that are adaptable to a consumption tax with either (or any) name. What Malaysia needs from policymakers is greater tax policy reform coherence, communication and ambition. And the leadership to design and deliver tax strategies and mechanisms that benefit Malaysia and Malaysians. ‒ July 2, 2025 Dr Stewart Nixon is the deputy director of research at the Institute for Democracy and Economic Affairs (IDEAS). The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia. Main image: Bigstock
New Straits Times
7 hours ago
- New Straits Times
Fahmi: Domestic Trade actively working to prevent profiteering after SST expansion
PUTRAJAYA: The Domestic Trade and Cost of Living Ministry is actively working to prevent any profiteering following the recent expansion of the Sales and Services Tax (SST) scope. Government spokesman Datuk Fahmi Fadzil said this was being done under an operation condenamed Op Kesan 4.0. "The public is encouraged to stay alert and lodge complaints about any instances of unreasonable price hikes at business premises by contacting the ministry's hotline. "Such complaints will enable authorities to swiftly identify the businesses involved and take appropriate enforcement actions," he said. Fahmi said this during his weekly post-cabinet meeting media briefing. On another matter, he said the cabinet has told the Health Ministry to monitor the weather conditions closely and issue appropriate announcements based on the situations. This, he said, was because of the ongoing southwest monsoon which led to dry and hot weather conditions nationwide.
Malay Mail
8 hours ago
- Malay Mail
Fahmi: Domestic Trade Ministry rolls out ‘Ops Kesan 4' to tackle profiteering after SST expansion
PUTRAJAYA, July 2 — The Domestic Trade and Cost of Living Ministry (KPDN) has launched 'Ops Kesan 4' to monitor and prevent profiteering activities following the expanded scope of the Sales and Service Tax (SST), said Communications Minister Datuk Fahmi Fadzil. He said the operation is part of the ministry's efforts to ensure that traders do not exploit the situation by raising prices unreasonably. 'The KPDN minister (Datuk Armizan Mohd Ali) announced yesterday the implementation of 'Ops Kesan 4', which among other things, aims to prevent profiteering following the SST expansion,' Fahmi said during the ministry's weekly press conference today. He urged the public to take note of the KPDN hotline and to lodge complaints if they come across any businesses charging unreasonable prices. Fahmi added that KPDN would promptly identify and take appropriate action against any businesses found guilty of such practices. Yesterday, Fahmi said he believed the new electricity tariffs would not lead to price increases. He also reiterated that some 23.6 million consumers are expected to benefit from lower electricity bills, with the revised tariffs taking effect yesterday. He said the new base tariff is 19 per cent lower than previously anticipated. 'For those using less than 1,000 kWh a month, their bills are likely to remain unchanged or may even be lower,' he said. He added that the most notable change under the new structure is the revised peak hours, now set from 2pm to 10pm starting yesterday.
