Clarification On Impact of Sales Tax On Raw Sugar

The Ministry of Finance (MOF) would like to clarify MSM Malaysia Holdings Berhad’s statement regarding the impact of the revised Sales Tax on raw sugar. 

1. MOF wishes to emphasise that refined sugar (or commonly known as white sugar) remains untaxed under the revised Sales and Service Tax that will be implemented effective on 1 July 2025.
   
   
2. The MADANI Government has taken a targeted approach by not taxing essential goods consumed by the rakyat such as sugar, salt, chicken, eggs, meat, fish, vegetables, cooking oil and rice among others. This is to ensure that the majority of Malaysians are not affected by the revisions to the SST.
   
   
3. Raw sugar, which is used as a raw material in the production process of refined sugar, will be subject to 5% Sales Tax. However, as announced earlier, manufacturers such as MSM are eligible to apply exemption on their inputs and raw materials.
   
   
4. Therefore, there should not be any increase in prices of refined sugar. This is especially when sugar refiners such as MSM have been benefitting from monthly incentives from the Government to ensure stability of supply and prices.
   
   
5. Refiners and manufacturers of sugar in Malaysia can seek exemption on their upstream input costs by applying for a Sales Tax exemption on raw material input through the Royal Malaysian Customs Department. This exemption is provided under Item 1, Column (2), Schedule B of the Sales Tax (Persons Exempted from Payment of Tax) Order.

Ministry of Finance
Putrajaya
20 June 2025