The Malaysian Iron and Steel Industry Federation (MISIF) has warned that imposing the Sales and Service Tax (SST) on key raw materials will trigger severe, far-reaching impacts on the steel value chain. It noted that taxing critical inputs, including scrap steel, coking coal, and coke, will directly raise production costs and weaken the competitiveness of Malaysian steel products.

MISIF emphasized that this will burden domestic manufacturers unsustainably, as many finished products enter Malaysia duty-free via various Free Trade Agreements (FTAs). Locally produced steel will be at a disadvantage due to higher costs from SST on core raw materials.

The federation further cautioned that such cost imbalances may stall high-value-added manufacturing investment, undermine sector employment stability, and deepen reliance on imported finished steel. These outcomes, it argued, run counter to national goals of securing domestic supply chains and reducing import dependency.

MISIF insisted that key steel production inputs must remain SST-exempt to safeguard the competitiveness, sustainability, and resilience of Malaysia’s steel ecosystem.