Margma lobbies for more inputs to be exempt from SST

This article first appeared in The Edge Financial Daily, on September 5, 2018.
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KUALA LUMPUR: Malaysian Rubber Glove Manufacturers Association (Margma) is trying to lobby for more input items to be exempt from the sales and services tax (SST).

The rubber glove industry will submit a list of items that should also be exempt from tax to the finance ministry and seek dialogue with the ministry, Margma president Denis Low Jau Foo said at a press conference at the ninth International Rubber Glove Conference and Exhibition here yesterday.

“In general, the principle that we seek is that the products that we export should have their input tax exempted.

“As far as export manufacturers are concerned now, there is only a small number of materials, like packaging, that are subjected to the SST,” he said.

He pointed out that the SST has “some sort of vagueness” in its implementation mechanism. “The government has already made the mechanism to approve the exemption a lot easier under the automated system via the Internet.

“As it is now there is still [some] sort of vagueness in [its mechanism]. This is where the industry is now ... which I believe the government is sorting out,” said Low.

Despite the prevailing uncertainty over the mechanism of the SST, glove makers are not expecting substantial impact from the tax regime.

However, Margma will still seek dialogue with the government to have a clearer picture on its mechanism, while the government is ironing out certain issues.

“As far as [the] SST is concerned, I do not see a big impact from the reintroduction of [the] SST on the glove industry because it is almost fully export-oriented,” said Low.

“A lot of raw materials used, such as latex liquid, are currently exempt from [the] SST,” he explained, noting that such raw material base forms the bulk of glove makers’ costs.