Zero-rated sales tax on agricultural inputs hailed as windfall for farmers

THE recent announcement of a zero-rated sales tax exemption for registered manufacturers producing livestock feed, fertilisers, and pesticides has been described as a “windfall” for Malaysia’s agricultural sector, offering much-needed relief to farmers and producers while helping to stabilise the cost of essential food products.

The Ministry of Agriculture and Food Security (KPKM) said the initiative, outlined in Prime Minister Datuk Seri Anwar Ibrahim’s 2026 New Year Address, is highly anticipated by industry players because it will reduce production expenses and, in turn, ensure that agricultural products remain affordable for consumers, supporting the country’s food security objectives.

“KPKM welcomes the full support for the New Year mandate 2026, particularly the emphasis on food security, which aligns with efforts to strengthen governance, enhance service delivery efficiency, and safeguard the well-being of the rakyat,” the ministry said in a statement.

The ministry also applauded the government’s commitment to continue the 5,000 Jualan Agro MADANI (JAM) initiatives this year. “This programme has proven effective in easing the cost of living by enabling citizens to access fresh produce and basic necessities at prices lower than the market rate,” KPKM added.

Under the new sales tax exemption, manufacturers registered with the relevant authorities will no longer be liable for tax on critical inputs, including livestock feed, fertilisers, and pesticides.

The measure is aimed at controlling production costs and ensuring stability across the national food supply chain.

KPKM affirmed its ongoing commitment to implement strategic initiatives that strengthen Malaysia’s food security comprehensively, in line with the ministry’s policy and long-term objectives.

Anwar announced the tax exemption as part of broader measures to support producers and protect consumers against rising prices, signalling a proactive approach to sustaining the nation’s agricultural output and securing affordable food for the public. - January 6, 2025