PETALING JAYA: As the government moves to impose a 5% sales tax on a wider range of imported food, local importers warn that the rising costs will ultimately be borne by Malaysian consumers and could affect healthy eating habits.
Chef Sivaji, a salmon importer and smoked salmon manufacturer in Malaysia, has voiced his concern over the decision to raise the Sales and Service Tax (SST) on imported salmon and cod.
“If 1kg of salmon costs RM35, with the 5% SST that’s an extra RM1.75 in tax. So, for a 5kg fish, we’re paying RM8.75 to the government.
“On top of that, there are already so many other taxes. Now, the government has decided to tax healthy food like salmon,” he said.
He said the new tax will ultimately be passed on to consumers.
“The taxes will be paid by consumers,” he said, adding that this will make salmon and cod more expensive at retail level.
Chef Sivaji urged the government to support the industry, noting that Malaysia is a relatively small player compared to countries such as Thailand, Indonesia and Vietnam.
“The government should be encouraging us to grow this business, not just focus on collecting taxes unnecessarily. It’s very sad and unacceptable.
“Besides the SST, we already have to invest in so many things like packaging, processing and transportation. It’s a huge burden,” he said when contacted.
Chef Sivaji also highlighted Malaysia’s role in the salmon industry as a processor rather than exporter, and said that demand has been increasing every year.
“We’ve been importing seafood like salmon and cod to Malaysia for over eight years, which we then process into smoked salmon. Demand has been growing year by year, but after this SST implementation, I don’t know what will happen,” he said, adding that they can’t absorb the extra cost.
He acknowledged that some might consider cheaper sources such as China, but then getting a halal certification is another challenge.
Items remaining in the 5% sales tax bracket include abalone and lobster, quinoa, cheese, fruit jams and smartphones.
From July 1, the revised sales tax will cover king crab, salmon and cod fish, truffles, imported strawberries, essential oils, silk fabrics and industrial machinery.
Consumers Association of Penang (CAP) president Mohideen Abdul Kader said the association supports the imposition of SST on non-essential items as those who can afford these types of goods may be able to bear the additional tax.
However, he pointed out that a shortage of local fruits has led to Malaysia importing certain varieties from Thailand.
“These are fruits which at a time grew abundantly in our orchards and backyard gardens. Given that local fruits have become increasingly expensive, we urge the government to promote and expand local fruit cultivation.
“This will help lower prices and improve availability before any decision to apply SST to these items is made,” he said.
Kuala Lumpur Fruits Wholesalers’ Association president Chin Nyuk Moy has expressed concern over the 5% sales tax currently imposed on imported strawberries.
She said it remains unclear whether other imported fruits, such as blueberries and avocados, will also be taxed.
“The most challenging issue for fruit vendors at the moment is the inconsistency in tax application when billing customers.
“We hope to seek clarification from the Finance Ministry and request the publication of a comprehensive list of fruits subject to the sales tax,” she added.
