WORDS DATUK DR RAJEN MANIKA
 FEATURED EXPERTDATUK DR RAJEN MANIKA President and Council Malaysian Dietary Supplement Association (MADSA) |
As we await the upcoming Budget 2025, set to be tabled in Parliament this October, we are presented with a critical opportunity to reassess the current tax policies, particularly on dietary and health supplement products.
THE QUESTION THAT MUST BE ADDRESSED IS: SHOULD HEALTH AND WELLNESS BE TAXED?
The simple answer is no, and yet, dietary supplements in Malaysia are currently subjected to a 5% sales and service tax (SST), with certain finished products also facing a 5% import duty.
This taxation is an unnecessary financial burden on Malaysians striving to maintain or improve their health.
Revising these tax policies is not just an economic adjustment; it is a vital step towards enabling all Malaysians to adopt healthier lifestyles, a change that has been long overdue, especially since the last review request was in 2021.
BALANCING PROTECTION AND QUALITY IMPROVEMENT
To fully understand the urgency of this issue, it’s important to consider how these taxes are not only affecting consumers, but also hindering the growth and quality of the local supplement industry.
The imposition of import duties on selected ingredients and finished dietary supplements is counterproductive. Instead of protecting local industries, these duties end up increasing production costs and consequently, retail prices.
In reality, the local supplement industry is heavily dependent on imported ingredients, and as of yet, there is no viable alternative.
For instance, let’s take a look at fish oil. Malaysia’s tropical waters simply do not yield the cold-water fish required to produce high-quality fish oil. The import duty on this essential ingredient does nothing to protect local industries, because there is no local equivalent that can meet the demand or quality.
By removing these import duties, production costs would decrease, and these savings could be passed on to consumers, making health supplements more affordable and accessible to the general public.
This is not just a matter of economic efficiency; it’s about prioritizing the health of our nation.
SST EXEMPTION FOR DIETARY SUPPLEMENTS?
The current application of SST on dietary supplements is another area in dire need of reform.
Currently, several dietary supplements containing ingredients such as vitamins, fish oil, spirulina, essence of chicken, Haruan fish, and more are imposed a 5% SST. On the other hand, all pharmaceutical products, including ascorbic acid (vitamin C), elemental iron, and medications containing multivitamins and minerals are tax exempted.
Exempting dietary supplements from SST aligns with the principle of allowing individuals the freedom to make informed choices about their healthcare. By removing SST from these products, the government can make them more affordable, encouraging more Malaysians to invest in their health.
Furthermore, as more Malaysians turn to dietary supplements, we can expect a decrease in non-communicable diseases (NCDs), which will ultimately lead to reduced healthcare costs for the government. It will be a clear win-win situation, where the public gains access to better health resources and the government reduces its long-term financial burden.
INTRODUCE LIFESTYLE TAX RELIEF AND TARGETED SUBSIDY STRATEGIES
In addition to removing taxes and import duties, the government should consider including dietary supplements in the existing lifestyle tax relief.
Tax reliefs have proven effective in encouraging healthier behaviors, and extending this benefit to include supplements would provide financial relief to those actively investing in their health.
However, broad-based subsidies can create a dependency that is counterproductive in the long term. Instead, the government should implement targeted subsidies for vulnerable groups, ensuring that financial assistance reaches those who need it most without fostering a culture of reliance. An end-of-subsidy monitoring plan could also be established to evaluate the effectiveness of these measures, ensuring they are both sustainable and successful in their intended goals.
Achieving long-term success in dietary supplementation requires a multi-faceted approach. It is imperative that local government agencies collaborate with supplement producers and relevant NGOs to educate the public about the benefits of dietary supplements. Through comprehensive education campaigns and awareness programs, we can empower consumers to make informed decisions about their health, dispelling myths and misinformation along the way.
For instance, the current ‘Tolak Ubat Tidak Sah’ campaign by the Ministry of Health could be similarly applied to dietary supplements as a friendly, accessible means to educate and spread awareness.
By adopting these measures, the government can support consumer health choices, enhance the quality of local products, and create a more competitive and vibrant supplement market.
Now is the time for action. By revising tax policies, offering targeted subsidies, and educating the public, we can ensure that dietary supplementation becomes an integral part of Malaysia’s approach to health and wellness. The health of our nation depends on it.
