As a critical component of Malaysia’s export economy, the rubber glove industry contributed RM15.41 billion in export revenue in 2024 and supports over 78,000 direct jobs nationwide. MARGMA cautions that applying SST to these core materials will lead to a sharp increase in production costs, especially impacting companies that have locked in forward sales contracts. For these firms, absorbing unexpected input cost hikes is unsustainable, and passing the cost on to international buyers is not viable due to the highly competitive global glove market.
Risk to Industry, Jobs, and Supply Chain Stability
Beyond immediate cost pressures, MARGMA warns of a ripple effect across the entire domestic rubber ecosystem. The expanded tax burden will raise operating expenses for upstream latex processors and chemical suppliers. Simultaneously, downstream manufacturers—including medical device and industrial glove producers, many of which are small and medium-sized enterprises (SMEs)—will face intensified cash flow constraints. This could slow job creation, deter automation and innovation, and potentially jeopardise Malaysia’s position as a global hub for high-value glove manufacturing.
Support for Fiscal Goals, Call for Balanced Execution
While acknowledging and supporting the Government’s broader revenue diversification goals, MARGMA believes taxation policy must be carefully calibrated to avoid undermining a sector that consistently contributes foreign exchange earnings, quality employment, and robust supply-chain linkages.
To that end, the Association joins other industry bodies in calling for a measured approach, including:
- Postponing the implementation date of the SST on latex raw materials.
- Conducting a comprehensive cost-benefit analysis, with input from industry stakeholders.
- Exploring targeted exemptions or zero-rated treatment for critical export-linked inputs.
Commitment to Collaborative Dialogue
MARGMA reaffirms its willingness to collaborate closely with the Ministry of Finance, the Royal Malaysian Customs Department, and other relevant agencies to co-develop a balanced solution. The goal: to ensure fiscal objectives are met without compromising the competitiveness and sustainability of Malaysia’s globally significant rubber glove sector.
