By DayakDaily Team
KUCHING, March 20: The introduction of the service tax marks a significant shift, primarily manifesting as an increase in operational costs which may be transferred to customers.
President of the Association of Marine Industries of Malaysia (AMIM) Adren Siow said the service tax will have a compounded effect through the supply chain supporting the marine industry.
He said the foremost impact of the new tax regulations is an anticipated increase in operational costs across the board. This stems from the additional tax liabilities that businesses within the marine sector are now required to manage.
It is likely that these increased costs may be transferred to customers, potentially elevating the expenses associated with the maintenance and repair of marine vessels.
He said this in light of the recent adjustments to the tax framework affecting the marine industry where he wished to address the community and all stakeholders involved, shedding light on the implications of these changes, particularly focusing on ship repair and Maintenance, Repair, and Overhaul (MRO) activities.
“We’re really hoping that our policymakers will take a moment to reconsider this tax. It’s about creating a fair playing field that not only supports growth and innovation but also champions sustainability in the marine MRO sector.
“If we can get our tax policies to match up more closely with those around the world, we’re not just protecting our industry’s future; we’re also boosting economic development and ensuring that we continue to lead the way in marine services. It’s an exciting opportunity for us to come together and make a positive change,” said Siow.
In response to service tax, president of Sarawak Association of Maritime Industries (SAMIN) Dr Renco Yong King Hwa opined that Sarawak has built a robust supply chain for shipbuilding and maintenance, repair, and overhaul (MRO), gaining international acclaim for its high-quality work and dedication to maritime excellence.
“The new service tax on marine MRO activities poses a challenge, potentially affecting our ability to compete on a global scale,” said Yong.
Malaysia Offshore Support Vessel Owners’ Association (MOSVA) President, Jamalludin Obeng said in light of these developments, MOSVA members find themselves contemplating the exploration of MRO services beyond our national borders, particularly towards neighboring countries such as Singapore, Indonesia, and Thailand.
“MOSVA wishes to emphasise that this contemplation does not diminish our dedication to Malaysia’s maritime industry. Instead, it underscores the importance of a collaborative approach in addressing the challenges posed by the new service tax, with the aim of fostering a more competitive and robust maritime sector in Malaysia,” said Jamalludin.
To Sabah and Sarawak Shipowners Association (SSSA) Honorary Chairman, Eddie Ling Soon King, the service tax on marine MRO services presents a significant concern for the future of domestic logistic transportation provided by Sabah and Sarawak shipowners.
“This new fiscal measure is poised to elevate operational costs, compelling these shipowners to adjust freight rates upwards to sustain their operations. Such a development not only impacts the competitiveness of our domestic logistics sector but also places an additional financial burden on the end consumers,” said Ling. — DayakDaily
