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GST and the Agricultural Sector in Malaysia
2015-04-01
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Malaysia will implement the Goods and Services Tax (GST) on 1 April 2015. GST is a multiple tax on domestic consumption. GST is charged on all taxable supplies of goods and services in Malaysia except those specifically exempted. GST is also charged on importation of goods and services into Malaysia. Consumers and intermediaries in the production and distribution process should pay the GST.  There are three GST rates applied to products and services traded in Malaysia: zero rate (0%), standard rate (6%) and exemption rate. However, most of agricultural products are subject to zero rate, such as rice, fruits, vegetables and live animals (cow, buffalo, goat, sheep, poultry and swine). Some fresh chilled or frozen meats and edible offal cow, buffalo and poultry are also charged at zero rates. 

      The agricultural products that are charged with 6% tax are processed products that include dried mushrooms and dates, other animal meats, such as dear, turkey, quail, goose and hedgehog. Animal feeds are also charged with a standard rate of 6%. The implementation of GST will not affect the price of most fresh agricultural products, but at the same time is expected to lead the increase in the price of processed products.

 

Source: Royal Malaysian Customs, April 1, 2015

(Research and summerized by Dr. Rozhan Abu Darkad)

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