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KOTA KINABALU: Malaysia’s timber sector is urging urgent government action as it faces a “triple burden” of expanded SST, rising diesel costs, and foreign worker shortages.

MTA president Tan Peng Juan said the pressures are driving up costs, limiting production, and weakening Malaysia’s global competitiveness, risking job losses and shrinking export share.

The July 2025 SST expansion imposed a 5pc tax on sawn timber, causing cascading costs and an estimated 8–12pc rise in downstream production.

At the same time, diesel prices nearing RM6 per litre in some regions are straining operations heavily reliant on fuel.

Labour shortages have further hit output, with some mills running at just 60% capacity due to high recruitment costs and delays in worker approvals.

The MTA is calling for tax exemptions on raw timber, fuel subsidies or rebates, and a streamlined foreign worker system, warning that without swift action, the industry faces a structural decline rather than a temporary setback.