KUALA LUMPUR (Oct 5): Palm oil producers are not subject to the sales and service tax (SST), Royal Malaysian Customs Director-General Datuk Seri Subromaniam Tholasy clarified today.

In a statement, Subromaniam said under the new SST framework, only imported fresh fruit bunches (FFB) will be subject to import sales tax to protect the interests of the domestic oil palm industry, especially that of smallholders.

“The Customs would like to clarify that, under Section 8 of the Sales Tax Act 2018, the sales tax is charged and levied only on taxable goods manufactured in Malaysia by a registered manufacturer, or taxable goods imported into Malaysia.

“Fresh fruit bunches (FFB) producers and vendors are not subject to the Sales and Services Tax Act of 2018, as they do not fall under the category of manufacturers,” he stated.

This is different from the previous taxation regime, where the 6% Goods and Services Tax (GST) was levied on both locally produced and imported FFB, he added.

The statement was issued in reference to a news report published yesterday, which quoted Malaysian Palm Oil Association chief executive officer Datuk Nageeb Wahab, who is also the FELCRA chairman, as urging the government to review the 5% sales tax on FFB.