Posted on 21 Jan 2026
The Malaysian Iron and Steel Industry Federation (MISIF) has reiterated its warning that imposing the Sales and Service Tax (SST) on primary raw materials will trigger severe, wide-ranging consequences for the nation's steel value chain, Kallanish notes.
The association says taxing essential inputs – such as steel scrap, coking coal, and coke – directly inflates production costs and erodes the competitiveness of Malaysian-made steel. This, MISIF warns, places an unsustainable burden on domestic manufacturers.
“This is particularly concerning as many finished products enter Malaysia duty-free under various Free Trade Agreements (FTAs),” the federation notes. “Meanwhile, locally produced steel is handicapped by higher costs driven by SST on its core raw materials.”
MISIF further cautions that these cost imbalances threaten to stall investment in high-value manufacturing, destabilise employment within the sector, and increase reliance on imported finished steel.
Such outcomes, the association argues, run counter to national goals of securing domestic supply chains and reducing import dependency. MISIF remains firm in its stance that primary steelmaking inputs must remain exempt from SST to preserve the "competitiveness, sustainability, and resilience" of Malaysia’s steel ecosystem.
Source:Kallanish
