Supplements, Rebates, and Savings: Reforming Policies for Wellness in Budget 2025

WORDS DATUK DR RAJEN MANIKA

FEATURED EXPERT
DATUK 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.

MADSA Calls for More Efforts to Safeguard Dietary Supplements in Malaysia

WORDS DR RAJENDRAN MANICKAVASAGAM

FEATURED EXPERT
DR RAJENDRAN MANICKAVASAGAM
Malaysian Dietary Supplement Association (MADSA)

Since the onset of COVID-19, Malaysians have been taking extra care of their health.

In fact, there has been a steady demand for dietary supplements propelled by this new collective awareness towards our overall wellbeing.

However, recent price hikes have raised the average living costs in Malaysia. For some, they may have to cut back on added expenses, which includes dietary supplements.

This situation opens doors for devious, illegal activities to take place within the market, especially through e-commerce websites where counterfeit supplements are sold at absurdly low prices.

For instance, a single joint support supplement may cost RM120 to RM180 at pharmacies, but some unscrupulous sellers offer the same product for only RM38.

Additionally, certain platforms and sellers may take advantage of unassuming consumers by offering attractive discounts and vouchers, further expanding this perpetual market of deceit in terms of people’s health and wellbeing.

VERY CHEAP SUPPLEMENTS: WHAT’S THE CATCH?

The allure of a good bargain can be extremely compelling, especially when one only needs to pay a fraction of the original price. However, the consequences of purchasing from unverified vendors or websites can be severe.

Counterfeits

A multitude of these sellers often operate without the necessary quality control measures.

Without proper scrutiny, these unscrupulous vendors can easily pass off fake supplements as genuine, putting consumers at risk of ingesting unknown and possibly harmful substances.

These products also may not follow proper standards of procedures, leading to higher chances of improper handling and contamination.

Effects on the Local Supplement Market

In addition to the health risks, these unverified sources also undermine the integrity of Malaysia’s legitimate nutritional supplements market, which is valued at USD $644.88 million in 2023.

Certified brands are finding it increasingly harder to earn customers’ trust who have been victims to disingenuous sellers.

THE NEED FOR REGULATORY RECOGNITION TO PROTECT CONSUMERS

In spite of these malicious activities, Malaysia upholds strict laws and regulations to govern the manufacturing and labelling of dietary supplements.

This includes mandatory registration of documented evidence and stringent timelines for health supplements. While some counterfeit products may slip through the cracks, the Ministry of Health, via the National Pharmaceutical Regulatory Agency (NPRA), has laid out various safeguarding measures to help consumers identify the legitimacy of a product.

The Ministry of Health has also mandated that all certified health supplements must be marked with the holographic sticker called the FarmaTag, which is extremely hard for counterfeit producers to replicate. The sticker also includes an MOH-issued QR Code, a gradient design, and holographic serial and pin numbers.

Additionally, the Health Ministry has released a mobile app called FarmaChecker to help consumers confirm a product’s certification status online by scanning its QR code or typing in its serial number.

At the same time, the NPRA continues to ensure the safety and efficacy of dietary supplements, mandating safety data for supplements with new or innovative ingredients. Similarly, the Malaysian Dietary Supplement Association (MADSA) has also worked hand-in-hand with the government to promote and increase awareness of health supplements and its benefits to all Malaysians.

With the collective effort by both the government and consumers alike, we can work towards a future where all our nutritional supplements are safeguarded from the unethical practices of counterfeit producers.

By being mindful of the sources of our purchases, especially when the products involve our health and wellbeing, we can nurture a safe and healthy supplements market in Malaysia.

After all, bargaining our health for cheaper costs will never be worth the price.

MADSA CALLS MALAYSIANS TO BE VIGILANT

MADSA advises Malaysian consumers to always make sure that online supplements have been registered by the NPRA.

Check if the product has an MAL number, which verifies that it has been approved by the NPRA.

If the product that’s delivered doesn’t have such identification, return and request for a refund and report this matter to the Ministry of Health.