KUALA LUMPUR: Customs, today, clarified that oil palm farmers selling their fresh fruit bunches (FFB) to millers are not subjected to 5 per cent Sales Tax as this is only imposed on imported FFB.
In a statement today, Customs Department director-general Datuk Seri Subromaniam Tholasy said, "prior to this, Goods and Services Tax (GST) was imposed on FFB sales, including those imported."
“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," he said.
“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 added.
Subromaniam was responding to a news report quoting Malaysian Palm Oil Association chief executive officer Datuk Nageeb Wahab, who is also the FELCRA chairman, appealing to the government to reconsider and review the 5 per cent Sales Tax imposed on FFB supplied by oil palm farmers.
To re-cap, from 1st September 2018, Malaysia started imposing a tax of 5 per cent and 10 per cent on the sale of goods, and a 6 per cent levy on services.
The SST replaced the GST which Prime Minister Tun Dr Mahathir Mohamad scrapped after returning to office earlier this year.
SST is currently imposed on taxable goods manufactured by an individual or company with an annual turnover exceeding RM500,000; and on taxable goods imported into Malaysia.