PM zeroes in on avocados amid backlash over imported fruits' SST

Summary

• Prime Minister Anwar Ibrahim says expanded SST on imported goods targets wealthy consumers of premium items like avocados.

• Anwar states that the increased tax revenue is necessary to fund public development needs.

• Consumer groups have criticised the expanded tax, warning it could impact fruit consumption among low-income households.

Prime Minister Anwar Ibrahim has defended the expanded sales and services tax (SST), particularly on imported fruits, saying the move aimed to tax the wealthy.

Touching on the five percent tax on imported fruits, Anwar gave the impression that this would only impact those who consume expensive fruits like avocados.

"Recently, it was in (the news) that on imported goods, bananas would be taxed. People got mad.

"People toil to grow (bananas) in Lumut, then we have to import bananas? Imported bananas are not pisang mas, awak, berangan varieties.

"Read properly, don't just whack. (The prices) that will go up are (imported) fruits, those who want to eat avocados. I heard the chief secretary to the government eats avocados.

"(Avocados) are expensive, imported. If you have a high income and want to eat avocados, go ahead. But pay a bit more, we are taxing avocados," he said in a speech at the Madani Rakyat programme in Lumut, Perak.

Anwar's speech ignores that the five percent sales tax will be imposed on all imported fruits, including those that are cheap and accessible to lower-income groups, such as apples, which are exclusively imported.

While bananas and all locally grown fruits are exempt from sales tax, the sales tax order gazette includes imported pisang mas and other fruits usually grown in Malaysia, such as rambutan and mangos.

This is because the local supply of fruits is not always sufficient, and imported stock is needed to meet market demand.

READ MORE: MOF justifies SST on imported fruits, cites sufficient local alternatives

Consumer groups have warned that the blanket tax on imported fruit could lead to nutritional gaps for lower-income households. However, a local nutritionist highlighted that many locally grown fruits can meet dietary needs.

Helping govt

Besides imported fruit, Anwar stressed that other goods being taxed include imported fish like cod.

He said broadening the tax base is needed to help the government fund public projects.

“If we don’t tax these (imported goods), where do we get the money to build Manjung Hospital? There won’t be any!” he stressed.

Anwar also pushed back against those calling for the government to reintroduce the goods and services tax (GST) instead of broadening the SST.

“Sometimes, MPs need a bit of a crash course. They love saying ‘SST is not good!’ ‘Return the GST!’ But do you even understand GST?

“Ask the secretary-general of the Economy Ministry or Finance Ministry - yes, GST is better and simpler. Six percent - everyone pays.

“But let me ask - if it’s six percent across the board, why should the poor and unemployed pay?” asked Anwar, who is also the finance minister.

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Local fruits not subject to sales tax, nor impacted by gazette order