PETALING JAYA: The Malaysian Rubber Glove Manufacturers Association (Margma) is urging the government to defer and review the imposition of 5% Sales and Service Tax (SST) on natural rubber latex and nitrile butadiene rubber latex raw materials.
In a statement today, Margma said the rubber glove industry is Malaysia’s largest export contributor to total rubber product exports, generating RM15.41 billion in export revenue last year and supporting more than 78,000 direct jobs.
Margma said applying SST to essential raw materials will immediately raise production costs.
For companies that have already secured forward sales, absorbing these sudden additional costs will prove unfeasible, the association added.
Margma said that at a time when global glove prices remain highly competitive, the added cost cannot be passed on to overseas buyers; instead, it will erode already thin margins, reduce cash flow for reinvestment and further weaken Malaysia’s share in a market now dominated by lower-cost producers.
Beyond direct cost escalation, it said, the expanded SST risks causing a cascading effect on the entire domestic rubber ecosystem.
“Upstream latex processors and chemical suppliers will face higher operating expenses, while downstream medical-device and industrial-glove manufacturers – many of them SMEs will feel the squeeze on working capital. This could slow job creation, deter future automation projects and jeopardise Malaysia’s strategic ambition to remain a global centre for high-value glove production,” said the association.
Margma said it fully supports the government’s broader revenue diversification agenda, but believes that taxation policy should not undermine a sector that has consistently delivered foreign exchange, high-quality employment and substantial upstream linkages.
“We therefore echo similar appeals by other associations for a calibrated approach: postpone the implementation date, conduct a thorough cost-benefit study with industry participation and consider targeted exemptions or zero-rating for critical raw materials where export competitiveness is at stake.”
Margma said it stands ready to collaborate with the Ministry of Finance, the Royal Malaysian Customs Department and all relevant agencies to craft a balanced solution that safeguards fiscal objectives while preserving Malaysia’s leadership in the global rubber glove value chain.
