By Ahmad Nizam Che Kasim

The recent proposal to include imported fruits under the Sales and Service Tax (SST) has triggered plenty of public debate. Some Malaysians are worried that this will lead to higher grocery bills, especially at a time when living costs are already rising.

But behind the headlines, this move opens up a bigger conversation: how can our tax system help – not hurt – local food production, farmers’ livelihoods, and even innovation in agriculture?

While the idea of taxing imported fruits may seem like a simple policy change, the impact could be far-reaching. On one hand, taxing imports can give Malaysian farmers a fighting chance against cheaper foreign produce.

On the other, the government must ensure local fruits are affordable, available, and of high quality so that consumers aren’t left paying more with fewer options.

Key role of a tax policy

But taxes can do more than just raise prices or protect local industries. In fact, tax policy plays a key role in shaping how food is grown, processed and delivered. It can even influence how fast the agricultural sector adopts new technologies, how environmentally friendly farming becomes, and how productive farms are over time.

Take innovation, for example. If the government offers tax relief or rebates for farms that invest in new machinery, water-saving systems, or digital tools, more farmers may be willing to modernise.

This not only improves productivity but also attracts younger people into agriculture – something Malaysia urgently needs.

Some countries also give special tax treatment to innovative start-ups or companies doing research and development (R&D). This could be done here too, especially to promote sustainable food solutions.

In terms of farm productivity, many farmers face income that can vary a lot from year to year due to weather or market prices.

Countries like Australia and Canada have introduced tax averaging, which lets farmers spread their income over a few years to reduce the overall tax burden.

This kind of policy can help Malaysian farmers have more financial stability and confidence to plan long-term.

Taxes and sustainability

When it comes to sustainability, taxes can also be used to reward good practices or discourage harmful ones.

For instance, farmers who adopt environmentally friendly practices could enjoy tax incentives, while polluting activities like excessive fertiliser use could face higher taxes. This helps protect the environment without punishing the entire farming sector.

Of course, any tax system must be fair, transparent, and inclusive. Essential food items should remain tax-free or taxed at a very low rate to protect low-income groups.

But beyond affordability, smart tax policies can create a food system that is innovative, sustainable, and resilient—from the farm to your plate.

As the debate over the fruit tax continues, Malaysians should also consider the bigger picture. With thoughtful planning, the tax system can become a powerful tool not just for revenue, but to build a better future for our farmers, our economy, and our food security.

-- BERNAMA

Ahmad Nizam Che Kasim is with the Faculty of Business & Communication at Universiti Malaysia Perlis.