Govt Urged To Scrap 5 Pct Sales Tax On Sawn Timber, Review SST Expansion

KUALA LUMPUR, Dec 3 (Bernama) -- The government has been urged to exempt the five per cent sales tax on sawn timber and to review the expanded scope of the Sales and Services Tax (SST), which has resulted in double taxation for the timber and wood-based industries.

Senator Tan Sri Low Kian Chuan said the expanded SST scope, effective July 1 2025, places sawn timber under the SS 4407 standard, making it subject to a five per cent sales tax.

“Sawn timber is currently taxed at five per cent. When sold to furniture manufacturers, the finished furniture is then taxed again at 10 per cent in the domestic market.

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“This clearly shows that the wood used in the furniture is taxed twice along the production chain,” he said during the Senate debate on the Supply (Budget) Bill 2026.

Low added that this contradicts Malaysia’s principle of a single-stage tax.

He also proposed that the government streamline the application, assessment, and approval processes for micro-financing loans to reduce costs and speed up fund disbursement.

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Low further suggested increasing the maximum loan amount under stamp duty-exempt micro-financing schemes from RM50,000 to between RM100,000 and RM200,000, as well as allowing voluntary e-invoicing for businesses with annual sales of RM500,000 and below.

On another matter, he urged the government to carefully review all aspects of the Agreement on Reciprocal Trade (ART) with the United States, including safeguard mechanisms and ongoing engagement with business groups.

-- BERNAMA