Fruit imports in Malaysia under threat due to new tax

A new tax rule will come into effect in Malaysia from July 1, 2025: according to information posted on the AsiaFruit portal, a sales tax of 5% will be levied on all imported fruits. The decision, according to the government, is “aimed at supporting local farmers and strengthening the country’s food security.”

However, the innovation has already caused a wave of concern among market participants. Importers, retailers and consumers fear that the tax could seriously hit the fruit market. Malaysia is heavily dependent on supplies from abroad – its climate does not allow growing many popular varieties, especially temperate fruits and off-season products.

According to EastFruit, in 2024, the country imported fruits worth more than $ 1 billion, taking 31st place in the world ranking. In Southeast Asia, only Vietnam, Hong Kong, Indonesia and Thailand purchased more. Over the past five years, import volumes have increased by 30%, which indicates growing demand and market development.

In quantitative terms, 640 thousand tons of fresh fruits were imported in 2024 – 20% more than in 2020. This has contributed not only to the growth of consumption of these products, but also to the development of related sectors of the economy, including logistics, storage infrastructure and even fruit exports, since many companies working with imports are also actively involved in exports.

Now, this entire chain is under threat. The new tax could make imported fruits less affordable, especially premium categories such as berries, avocados, cherries and other stone fruits. These products are already expensive due to high transportation costs and their perishable nature. The increase in prices could scare off middle-income buyers and slow down the growth of the sector.

In addition, experts doubt that the tax will really help local producers. Many of the fruits taxed – such as apples, grapes and some citrus fruits – are simply not grown in Malaysia on the required scale. Even local fruits are often supplemented by imports out of season.

Malaysia is also an important market for countries such as China, Egypt, Australia and the United States. The new tax could reduce its attractiveness to international partners, and trade flows could be reoriented to other countries in the region. This, in turn, could result in missed opportunities for both local businesses and global suppliers.

Tags: Malaysia, taxes, restrictions, fruits