Posted on 06 May 2025
Two groups representing the steel industry in Malaysia have joined calls for a further delay to the expansion of the sales and service tax (SST), beyond the revised implementation date of June 1.
The Malaysian Iron and Steel Industry Federation (Misif) and Malaysia Steel Association (MSA) said the industry was facing “extreme market difficulty”, including rising energy and raw material costs, as well as slow domestic demand.
In a statement, they also called for the mandatory 2% EPF contribution for the employers of foreign workers to be deferred.
“At a time of extreme market difficulty, new compliance costs could have unintended consequences. The (mandatory EPF contribution for foreign workers and SST expansion) risk further burdening the industry.
“Misif and MSA urge the government to defer or reconsider the implementation of these measures to avoid compounding operational pressure and harming recovery efforts,” they said.
The Federation of Malaysian Manufacturers previously urged Putrajaya to deter the implementation of the expanded SST, warning of its potential impact on businesses and consumers in view of the US tariffs and the upcoming review of electricity base tariffs in July.
The expansion of the SST was supposed to be implemented from May 1 but this was postponed, with the finance ministry saying the matter was still being discussed with stakeholders.
Misif and MSA said there was an oversupply of steel in the market and that Malaysia also risked becoming a dumping ground for excess steel from other nations.
They said that neighbouring countries like Vietnam, Indonesia, and Thailand had enacted anti-dumping duties to protect their local steel sectors, and called for Malaysia to do the same.
The associations also appealed for a special industrial electricity tariff for steelmakers, saying nations like the UK and Germany had employed similar targeted measures to offset energy costs in the steel industry.
They proposed that Putrajaya enforce a “Buy Malaysia First” policy, particularly for steel products, to spur domestic demand and utilise the available capacity of steel products.
“Misif and MSA reaffirm our commitment to working closely with the investment, trade and industry ministry and all relevant stakeholders to implement meaningful and timely solutions.
“However, the time for study and deliberation has passed – what is now needed is bold, immediate action. We call on the government to act swiftly to preserve the industry’s long-term competitiveness, safeguard thousands of jobs, and secure Malaysia’s industrial future,” they said.
Source:Free Malaysia Today
