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 (pic), the Ministry of Investment, Trade and Industry (Miti) said.
Miti said the exemptions are similar 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.
“However, at present, most fresh fruits have already been granted a general tax exemption to safeguard national food security,” it said in a written response to the Dewan Negara, published on the Parliament website Tuesday.
The ministry was responding to Senator Tan Sri Low Kian Chuan’s question on 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 said that while Malaysia has implemented various FTAs, including CPTPP and RCEP, the country’s tariff commitments under these agreements focus solely on the elimination or reduction of import duties.
“This in no way affects Malaysia’s right to impose taxes and implement domestic measures.
“The government, therefore, retains full policy space and flexibility to continue implementing domestic taxes such as SST, excise duties, and others, including granting exemptions under the existing tax system, without being bound by the ART,” the ministry added.
Separately, in response to Senator Rita Sarimah Anak Patrick Insol on 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 said Malaysia and the US will use the Joint Committee under the Trade and Investment Framework Agreement (TIFA) as the primary platform to monitor ART implementation.
“This platform will ensure comprehensive oversight of tariff reduction commitments, facilitate the removal of non-tariff barriers, recognise Malaysian product standards, and track other commitments agreed under the ART.
“The committee is co-chaired by Miti and the United States Trade Representative (USTR), with participation from relevant ministries and agencies of both countries,” Miti said.
According to the ministry, monitoring will be conducted through regular TIFA meetings to assess ART implementation progress, alongside specialised technical meetings to collect technical information and data to ensure compliance with all commitments.
