Malaysia expands sales tax exemption for animal feed raw materials

MALAYSIA – Malaysia has expanded its sales tax exemption to cover approved raw materials used exclusively in the manufacture of animal feed, in a move that could reduce input costs for eligible feed manufacturers.

The change took effect on 1 September 2026 under the Sales Tax (Persons Exempted from Payment of Tax) (Amendment) (No. 2) Order 2026, which expands Schedule B of the 2018 order.

Under the amendment, manufacturers approved by the Director General of Customs can receive an exemption from sales tax on goods approved by the Minister of Finance and used solely to manufacture animal feed products. 

Similar exemptions apply to raw materials used for fertiliser and pesticide production.

Lowering feed manufacturing input costs

The measure covers manufacturers that import or purchase approved goods for feed production. 

To qualify, manufacturers must meet specific requirements, including holding a manufacturing licence under the Industrial Co-ordination Act 1975 or a confirmation of exemption from the manufacturing licence requirement issued by the Malaysian Investment Development Authority (MIDA).

Eligible manufacturers must also obtain a certificate from the Royal Malaysian Customs Department through the MySST portal before claiming the exemption.

The exemption follows Sales Tax Policy 1/2026, introduced in February and amended in June, which provided a sales tax refund mechanism for certain raw materials used in animal feed, fertiliser and pesticide manufacturing. 

The refund mechanism is scheduled to expire on 31 October 2026.

The new exemption therefore shifts the treatment from a refund mechanism to an exemption for qualifying purchases or imports covered by the amended order.

For the feed industry, the change provides a more direct route to sales tax relief on approved manufacturing inputs. 

It also comes as Malaysia seeks to support domestic production across its agricultural supply chains.

The amendment was gazetted on 28 August 2026 and is now in force. Malaysia’s Royal Malaysian Customs Department has also listed the order on its MySST portal.

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