KUALA LUMPUR — Refined sugar, commonly known as white sugar, will remain exempt from tax under the revised Sales and Service Tax (SST) framework coming into effect on July 1, the Finance Ministry (MOF) announced today.
In a statement, the MOF clarified that while raw sugar used in the production of refined sugar will be subject to a 5% sales tax, manufacturers such as MSM Malaysia Holdings Bhd are eligible to apply for tax exemptions on raw materials and production inputs.
“Therefore, there is no reason for any increase in the price of refined sugar — particularly as refiners like MSM continue to receive monthly government incentives to ensure price and supply stability,” the ministry said, according to Bernama.
The statement was issued in response to comments made by MSM regarding the potential impact of the SST revision on raw sugar.
The MOF stressed that the government has adopted a targeted approach by not imposing tax on essential goods, including sugar, salt, chicken, eggs, meat, fish, vegetables, cooking oil, and rice.
“This is to ensure that the SST revision does not affect the majority of the population,” the ministry added.
It also noted that sugar refiners and manufacturers in Malaysia may apply for exemptions through the Royal Malaysian Customs Department under Item 1, Column (2), Schedule B of the Sales Tax (Persons Exempt from Payment of Tax) Order.
Yesterday, MSM — Malaysia’s national refined sugar producer — said it was reviewing the implications of the 5% sales tax on raw sugar and had sought further clarification from the government, particularly concerning the impact on the prices of regulated goods.
MSM group CEO noted that the retail price of sugar in Malaysia has been capped at RM2.85 per kilogramme since 2011, despite the global increase in raw sugar prices in recent years.
He added that although producers could theoretically pass on tax-related costs to the industry, this is not possible for refined sugar due to price controls.
“Between 75 to 80 per cent of MSM’s production costs come from raw sugar,” he said. — June 20, 2025