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Kuala Lumpur, July 9 – The Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) is urging the Malaysian government to implement a temporary reduction in the Sales and Service Tax (SST) rate. This call comes as the nation braces for potential economic impacts stemming from new tariffs imposed by the United States.

ACCCIM believes that a temporary SST reduction would provide much-needed relief to businesses and consumers, mitigating the effects of rising costs and uncertainty in the global trade landscape. The organization’s concern stems from the potential ripple effect of US tariffs on Malaysian exports, particularly in sectors like electronics, rubber products, and palm oil.

“The US tariffs are a significant concern for Malaysian businesses, especially small and medium-sized enterprises (SMEs) which form the backbone of our economy,” stated a spokesperson for ACCCIM. “A temporary SST reduction can act as a buffer, helping businesses absorb some of the increased costs and maintain competitiveness in the international market.”

The expanded SST, currently at 6%, was implemented in September 2022, replacing the Goods and Services Tax (GST). While the government argued that the SST was designed to be simpler and more efficient to administer, businesses have voiced concerns about its impact on their bottom lines, particularly in light of global economic headwinds.

ACCCIM’s proposal for a temporary reduction isn't a call to abolish the SST entirely. Instead, they advocate for a strategic, time-bound measure to ease the immediate pressure on businesses. This could involve lowering the SST rate for a specific period, or offering targeted tax relief to industries most affected by the US tariffs.

The organization emphasizes the importance of maintaining a stable and predictable business environment to attract foreign investment and foster economic growth. They suggest that the government should continuously monitor the impact of the US tariffs and be prepared to adjust its fiscal policies accordingly. A proactive approach, including measures like the proposed SST reduction, is seen as crucial to safeguarding Malaysia’s economic interests.

Furthermore, ACCCIM recommends that the government actively engage in diplomatic efforts to address the US tariffs and explore alternative markets for Malaysian exports. Diversifying export destinations is considered a long-term strategy to reduce reliance on any single market and enhance the resilience of the Malaysian economy.

The call for an SST reduction highlights the challenges faced by Malaysian businesses in navigating a complex and evolving global trade environment. ACCCIM’s proactive stance demonstrates their commitment to supporting the business community and advocating for policies that promote sustainable economic growth and prosperity for Malaysia.

The government is yet to respond officially to ACCCIM's proposal, but the discussion underscores the growing urgency to address the potential economic fallout from the US tariffs and find ways to support Malaysian businesses during this challenging period.