Finance Minister II Johari Abdul Ghani today said new taxes on imported steel products were meant to protect the local steel industry.
He was responding to the Masters Builders Association of Malaysia, which warned that property buyers would foot higher construction costs due to new taxes on imported steel products.
Pointing to local factories which produce similar products, Johari said the local industry would be affected and workers retrenched if the products continue to be imported into the country.
"We cannot allow people to come and sell things with such a cheap price with the intention to kill local businesses.
"This is why we are trying to ensure that this doesn't happen. If not, no one can do business in Malaysia because everything is imported," he told reporters in Kuala Lumpur today.
Johari also does not see the need to import such products if they could be manufactured in the country.
"But if the product is not available in the country or there is not enough of it for development purposes, then it's okay, we can allow for it to be imported.
"This will all go through a process and the International Trade and Industry Ministry will look into this," he said.
Builders vs manufacturer
Asked on the government's move to ensure the new taxes will not affect consumers, Johari said the Domestic Trade, Co-operatives and Consumerism Ministry will ensure that supply and demand is taken into account in any decisions made on the matter.
"If there is no balance, we are worried that businesses will make use of the opportunity and consumers will be affected," he said.
The Masters Builders Association on Friday had expressed its disagreement over the additional duties imposed on imported steel products, pointing out how the duties will increase the cost of construction projects.
The affected imported steel products are steel concrete reinforcing bars (rebar) and steel wire rods and deformed bar in coils, which are used in the construction industry.
According to an order published in the national gazette which was signed off by Johari, a 13.9 percent definitive safeguard duty will be imposed on steel wire rods and deformed bar in coils.
The definitive safeguard duty came into effect yesterday and will last for three years, until April 2020. The duty rate will be reduced by one percent every year.
A definitive safeguard duty of 13.42 percent will also be imposed on imported steel concrete reinforcing bars.
The duty will also last for three years but will be reduced to 12.27 percent effective April 14, 2018 and 11.10 effective April 14, 2019. These are on top of regular import duties.
The International Trade and Industry Ministry had said the imposition of the definitive safeguard duties was a result of two safeguard investigations last year.
It said the investigation was based on petitions filed by the Malaysia Steel Association. The petitions claimed that increased importation of the steel products had seriously injured the domestic steel industry.- Mkini