Tuesday 17/06/2025

PETALING JAYA, June 17 (Bernama) -- The Malaysian Plastics Manufacturers Association (MPMA) is calling on the Government to immediately defer the expanded Sales and Service Tax (SST) and to initiate structured consultation with affected industries. The sudden rollout announced without adequate notice, clarity, or stakeholder engagement has already disrupted operations, particularly for exporters and companies with raw material shipments currently en route to Malaysia.
 
MPMA expresses serious concern over the lack of transparency and consultation in this decision-making process. Consultation is not a formality, it is essential. Policies made without industry input often fail to reflect practical realities, leading to unintended consequences such as reduced competitiveness, lower investor confidence, and broader economic instability.
 
“Raw materials represent between 60% and 80% of total manufacturing costs, depending on the product,” said Mr CC Cheah, MPMA President. “Plastic products are vital for packaging essential food and beverage items - rice, sugar, flour, bread, vegetables, meat, cooking oil, milk, and are also critical for medical and hygiene products that safeguard public health.”
 
Plastic materials are also key components in various industries, including consumer electronics, automotive, agriculture and construction. Many of these products such as films, bags, containers, bottles, and industrial components are already subject to a 5% SST. With the expansion now covering previously exempt raw materials, the industry faces double taxation, which will inevitably increase costs for end consumers.
 
The consequences will be particularly harsh for SMEs, which operate with minimal profit margins. These businesses will struggle to absorb additional tax burdens and will likely have to pass costs on to consumers, resulting in higher prices for a wide range of essential goods during a time of economic recovery.
 
Further, the new SST expansion includes a 5% tax on all machinery and equipment, including automation and robotics used in plastics manufacturing. This threatens to undermine investments in automation and slow progress toward Industry 4.0, weakening productivity and innovation in a key sector of Malaysia’s economy.
 
Given these concerns, MPMA respectfully calls on the Government to:
 
1.      Defer the SST expansion until full and transparent consultation is conducted;
 
2.      Provide exemptions or transitional relief for goods already ordered or currently in transit;
 
3.      Clearly communicate the full scope, timeline, and compliance requirements; and
 
4.      Establish a permanent consultation platform to guide long-term tax and regulatory planning.
 
The plastics industry continues to support Malaysia’s economic growth. A consistent and collaborative policy environment will help strengthen Malaysia’s position as a competitive and trusted global trading partner.
 
Issued by:
Malaysian Plastics Manufacturers Association (MPMA)
www.mpma.org.my

SOURCE: Malaysian Plastics Manufacturers Association (MPMA)

FOR MORE INFORMATION, PLEASE CONTACT:
Name: Mr Mohd Fariz/Mr SC Chan
Tel: +603 7876 3027
Email: fariz@mpma.org.my/scchan@mpma.org.my

--BERNAMA