As Malaysia prepares for the upcoming Budget 2025, there is a growing call to reassess the current tax policies on dietary and health supplement products.
According to Dato Dr. Rajen M., President and Council of the Malaysian Dietary Supplement Association (MADSA), advocates argue that health and wellness should not be subjected to taxation, particularly as dietary supplements in Malaysia currently incur a 5% sales and service tax (SST), along with a 5% import duty on certain finished products.
Critics contend that these taxes impose an unnecessary financial burden on Malaysians striving to maintain or improve their health. They argue that revising these tax policies is essential for promoting healthier lifestyles across the nation, a change that has been long overdue since the last review request in 2021.
The current taxation framework not only affects consumers but also hampers the growth and quality of the local supplement industry. Import duties on selected ingredients and finished dietary supplements are deemed counterproductive, as local manufacturers often rely on imported components.
For instance, high-quality fish oil, which cannot be sourced locally from Malaysia’s tropical waters, faces import duties that do not protect local industries but rather inflate production costs and retail prices.
Removing these import duties could lower production costs, allowing savings to be passed on to consumers and making health supplements more affordable and accessible. This reform is viewed as a priority for the health of the nation.
Additionally, the application of SST on dietary supplements needs urgent reform. Currently, supplements containing essential ingredients such as vitamins and fish oil are taxed, while pharmaceutical products like Ascorbic Acid (Vitamin C) and multivitamins enjoy tax exemptions.
Advocates argue that exempting dietary supplements from SST aligns with the principle of allowing individuals to make informed healthcare choices and could encourage investment in health.
The government is also encouraged to include dietary supplements in existing lifestyle tax relief programs. Such measures have proven effective in promoting healthier behaviors and would provide financial relief for those investing in their health. However, broad-based subsidies are cautioned against as they may foster dependency.
Instead, targeted subsidies for vulnerable groups could ensure financial assistance reaches those in need without creating reliance.
Furthermore, collaboration between local government agencies, supplement producers, and relevant NGOs is crucial for educating the public about the benefits of dietary supplements. Comprehensive education campaigns can empower consumers to make informed health decisions, countering myths and misinformation.
By adopting these proposed measures, the government can support consumer health choices, enhance the quality of local products, and foster a more competitive supplement market. As Budget 2025 approaches, the call for action emphasises that the health of the nation depends on revising tax policies and prioritizing the well-being of all Malaysians.
Commentary by Dato Dr. Rajen M., President and Council of the Malaysian Dietary Supplement Association (MADSA)
