Kuala Lumpur: The Ministry of Finance has confirmed that refined sugar, commonly known as white sugar, will not be subject to the expanded sales and services tax (SST) set to take effect on July 1.
However, the ministry clarified in a statement on Friday that raw sugar, the main input used in producing refined sugar, will continue to carry a 5% sales tax, as previously announced. Despite this, sugar refiners such as MSM Malaysia Holdings Bhd can apply for a tax exemption, the ministry noted.
“There is no reason for an increase in prices of refined sugar, especially since refiners like MSM continue to receive monthly incentives from the government to maintain stable supply and pricing,” the ministry stated.
The clarification follows comments from MSM, one of only two sugar refiners in the country, which raised concerns over mounting cost pressures from the new tax rules. Retail sugar prices in Malaysia have remained capped at RM2.85 per kilogram since 2011, despite a steady rise in global raw sugar prices.
MSM’s Chief Executive Officer, Syed Feizal Syed Mohammad, said on Thursday that the company was awaiting further clarification from the government regarding the tax changes.
According to the Ministry of Finance, refiners and manufacturers may apply for tax exemptions through the Customs Department. The exemption falls under Item 1, Column (2), Schedule B of the sales tax order, which lists persons exempt from paying the tax.
