Malaysia’s Ministry of Investment, Trade and Industry (Miti) said fruit traders and importers can submit applications directly to the Ministry of Finance (MoF) to obtain Sales and Service Tax (SST) exemptions on imported fruits.
Miti stated that the exemptions resemble those granted under the Malaysia–United States Agreement on Reciprocal Trade (ART) but remain subject to evaluation and approval by the MoF in accordance with the Sales Tax Act 2018.
“However, at present, most fresh fruits have already been granted a general tax exemption to safeguard national food security,” it said.
The ministry was addressing Senator Tan Sri Low Kian Chuan’s inquiry on whether Malaysia’s trading partners under the Regional Comprehensive Economic Partnership (RCEP), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), or other free trade agreements (FTAs) could receive SST exemptions on fruit imports similar to those granted to the United States under the ART.
Miti clarified that although Malaysia has entered into multiple FTAs, including the CPTPP and RCEP, the nation’s tariff commitments under these agreements are limited to the removal or reduction of import duties.
“This in no way affects Malaysia’s right to impose taxes and implement domestic measures. The government, therefore, retains full policy space and flexibility to continue implementing domestic taxes such as SST, excise duties, and others, including granting exemptions under the existing tax system, without being bound by the ART,” the ministry added.
In a separate response to Senator Rita Sarimah Anak Patrick Insol, Miti addressed the mechanisms to ensure U.S. compliance with tariff reduction commitments and recognition of Malaysian product standards under the ART.
Miti stated that Malaysia and the United States will use the Joint Committee under the Trade and Investment Framework Agreement (TIFA) as the primary platform to monitor ART implementation.
“This platform will ensure comprehensive oversight of tariff reduction commitments, facilitate the removal of non-tariff barriers, recognize Malaysian product standards, and track other commitments agreed under the ART,” Miti added.
The ministry explained that monitoring will take place through regular TIFA meetings, complemented by specialized technical sessions to gather information and data, ensuring full compliance with all commitments.
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