Kuala lumpur: Fruit traders and importers can apply directly to the Ministry of Finance (MoF) for exemptions from Sales and Service Tax (SST) on imported fruit, the Ministry of Investment, Trade and Industry (MITI) said. MITI stated that the exemptions are akin to those provided under the Malaysia-United States Agreement on Reciprocal Trade (ART), but are subject to assessment and approval by the MoF under the Sales Tax Act 2018.
According to BERNAMA News Agency, MITI clarified that most fresh fruits have already been granted a general tax exemption to safeguard national food security. The ministry made this statement in response to Senator Tan Sri Low Kian Chuan’s inquiry regarding whether Malaysia’s trading partners under the Regional Comprehensive Economic Partnership (RCEP), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), or other free trade agreements (FTAs) could apply for SST exemptions on fruit imports as the United States does under the ART.
MITI further explained that while Malaysia has implemented various FTAs, including CPTPP and RCEP, the tariff commitments under these agreements are focused solely on the elimination or reduction of import duties. This does not influence Malaysia’s authority to impose taxes and implement domestic measures. Therefore, the government retains the flexibility to continue implementing domestic taxes such as SST and excise duties, including granting exemptions under the existing tax system without being bound by the ART.
In a separate response to Senator Rita Sarimah Anak Patrick Insol regarding the mechanisms the government will use to ensure the United States complies with its tariff reduction commitments and recognises Malaysian product standards under the ART, MITI mentioned that Malaysia and the US will utilise the Joint Committee under the Trade and Investment Framework Agreement (TIFA) as the primary platform to monitor ART implementation. This platform is intended to provide comprehensive oversight of tariff reduction commitments, facilitate the removal of non-tariff barriers, recognise Malaysian product standards, and track other commitments agreed upon under the ART.
The committee overseeing this process is co-chaired by MITI and the United States Trade Representative (USTR), with participation from relevant ministries and agencies of both countries. According to the ministry, monitoring will be conducted through regular TIFA meetings to assess ART implementation progress, along with specialised technical meetings to gather technical information and data ensuring compliance with all commitments.