Malaysia’s manufacturers seek tax relief, diesel subsidies and supply chain support as the West Asia conflict disrupts costs and logistics.
KUALA LUMPUR: The Federation of Malaysian Manufacturing (FMM) is calling for urgent government intervention to shield the sector from the escalating impact of the West Asia conflict.
President Jacob Lee Chor Kok warned that rising costs, supply delays and operational uncertainty are already affecting manufacturing output and export fulfilment. He said the crisis demands a coordinated whole-of-government response.
FMM has proposed several specific measures to ease the burden on businesses. It is urging the government to exempt reimported export cargo from sales tax and import duty, provided the goods are not sold domestically upon return.
The federation also seeks a double tax deduction on crisis-related logistics expenditures for the current and following year of assessment. Manufacturers are absorbing extraordinary costs including war risk surcharges, excess freight charges and elevated marine cargo insurance premiums.
“FMM urges the government to provide a double tax deduction on these crisis-related logistics expenditures for the current and following year of assessment,” Lee said.
Another key request is for the government to extend diesel subsidy coverage to fuel-intensive industrial sectors with no viable alternative energy source. Lee highlighted marine logistics operators serving Sabah and Sarawak as a particular priority.
To ensure stable raw material supplies, FMM suggests the government direct national energy producers and major domestic refiners to prioritise domestic allocation of key feedstocks. It also recommends facilitating temporary duty and tax exemptions for imports from alternative sources.
Lee emphasised that the sector, which accounts for 23.4% of GDP, cannot afford to be left behind as other nations act. He noted that Thailand, India and South Korea have each established coordinated government-industry mechanisms to address the same disruption.
FMM stands ready to work with the government as an active partner in crafting a response. The crisis impacts energy costs, logistics, raw material supply, tax treatment and port operations simultaneously.
