FMM in The News: THE EDGE, KUALA LUMPUR, October 18, 2024 - The Federation of Malaysian Manufacturers (FMM) has voiced its disappointment with the government’s decision to increase the excise duty on sugar-sweetened beverages under Budget 2025.
FMM instead called for a holistic, sustainable and multi-pronged approach to address obesity and non-communicable diseases in the country, its president Tan Sri Soh Thian Lai said in a statement on Friday.
“Education and supporting Ministry of Health (MOH) initiatives through the 'Healthier Choice Logo' (HCL), community involvement, and accessible health care services is more favourable than a ‘hard policy' such as taxation,” Soh said.
Earlier, Prime Minister Datuk Seri Anwar Ibrahim in presenting Budget 2025 to the Parliament said the government plans to increase the excise duty rate for sugar-sweetened beverages to 90 sen per litre next year, from 50 sen currently.
Reconsider sales tax hike on premium imported goods
Besides the sugary drink tax, FMM also hoped that the government would carefully assess the proposal to increase sales tax on premium imported products such as salmon and avocados.
“Many of these products are already subject to a 5% sales tax. Raising the tax could introduce administrative challenges and place an additional burden on consumers, especially as these products have become more common in Malaysian households,” he said.
Thus, the federation calls for a thorough review to ensure the policy achieves its goals without introducing unintended impacts on the people.
While it also welcomed the government's effort in addressing the environmental, social and governance (ESG) issues such as introducing a carbon tax in 2026, FMM hoped that this would not lead to higher electricity tariffs for the industrial sector.
“Given the coverage of the proposed carbon tax on the iron and steel and energy sectors, it is crucial that the government have in place the Emission Trading Scheme, which is the preferred mechanism by the industry, to drive more cost-effective emission reductions,” he suggested.