MISIF stated that applying SST to key inputs such as steel scrap, iron ore, coking coal and coke would directly increase production costs and weaken the competitiveness of locally produced steel. Many products are already subject to 5-10 percent VAT, and the grace period that previously exempted some raw data has now ended with the latest tax update.
Impact on competitiveness and trade
The Federation stressed that this tax burden on raw materials arises at a time when many finished steel products enter Malaysia duty-free under free trade agreements (FTAs). As a result, local steel may face higher costs than imported steel, creating uneven competitive conditions in the market.
MISIF warns that such cost imbalances can have widespread consequences throughout the steel value chain. Higher production costs can weaken employment, discourage investment in value-added production, and increase dependence on imported finished steel products - results that run counter to national goals of strengthening domestic supply chains and reducing dependence on imports.
Opposition to proposed tax compromises
The Federation also rejected suggestions that it
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