07/07/2025

BIZ & FINANCE MONDAY | JULY 7, 2025

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Expansion of SST and non-reviewable contracts I T IS very common for businesses to sign long-term contracts that will go beyond one year. At the time of signing these contracts, the parties to the stamped before June 9, 2024 is of a retrospective nature and one of the important principles of tax is “certainty”. Bringing in rules and legislation that are applied retro spectively is not good practice or law. We believe the purpose of introducing June 9, 2025 as

CIG, EG Industries to expand operations at Batu Kawan facility PETALING JAYA: Cambridge Industries Group (CIG), a global leader in optical and broadband technologies, and EG Industries Bhd, its manufacturing partner, have signed a letter of intent (LoI) to expand manufacturing operations in Batu Kawan, Penang, in addition to that in Sungai Petani, Kedah. The milestone marks a significant step in strengthening CIG’s and EG’s global pro duction footprint to meet the growing demand for advanced optical, wireless and broadband connectivity – driven by the rapid rise of artificial intelligence, cloud computing and next-generation networks. In a joint statement, CIG and EG Industries said they will strengthen their collaboration to scale up production capabilities, including the addition of high-speed surface mount technology lines, expansion of cleanroom facilities for optical modules and enhanced automation in testing and packaging at the Batu Kawan facility. The initiatives support CIG’s innovation roadmap and reinforce its strategic partnership with EG Industries to meet the evolving needs of customers worldwide. CIG CEO Gerald Wong said the LoI represents a major milestone in its long-term partnership with EG Industries, adding that it underscores its commitment to building capacity that meets global customer demand with agility, quality and cutting-edge technology. EG Industries CEO Datuk Alex Kang said, “We are proud to deepen our collaboration with CIG through this LoI. Our state-of-the-art facility in Batu Kawan, Penang, will play a pivotal role in supporting the production of next-generation technologies, especially 5G and 5G Advanced Network with ‘Release 18’ for global markets.” The expanded collaboration also reinforces regional supply chain resilience and enhances delivery efficiency across CIG’s global customer base, he added. Gold futures trading to remain bullish as US tariff deadline nears KUALA LUMPUR: Gold futures on Bursa Malaysia Derivatives are expected to maintain their bullish momentum, supported by renewed investor interest in safe-haven assets following the United States’ tariff deadline on Wednesday, which has added a layer of uncertainty to the market. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said that should the final tariff announcement signal rising trade tensions, gold could attract further buying interest. “Broader concerns over global growth, inflation and geopolitical risks continue to support the precious metal. Additionally, any signs of weakness in the US dollar or a dovish tilt from US central banks could reinforce gold’s upward trend. “However, the overall outlook remains cautiously optimistic as markets await clearer policy cues,” he told Bernama. On a weekly basis, the spot July 2025 contract went down to US$3,351.30 (RM14,157) per troy ounce from US$3,355.10 per troy ounce, August 2025 fell to US$3,366.40 from US$3,370.80, while September gained to US$3,381.30 from US$3,370.80. The October and December 2025 all rose to US$3,400.10 per troy ounce from US$3,370.80 per troy ounce last Friday. Trading volume decreased to 133 lots from 173 lots recorded in the preceding week, while open interest climbed to 84 contracts from 36 contracts. – Bernama

Other problems around non-reviewable contracts It is very likely that we are going to face in the future the same problems we faced when we dealt with similar provision when the Goods and Services Tax was in force. The kind of problems that taxpayers are going to face is the meanings of the phrases “fixed contract values”, “reviewable or not reviewable” and “price revision clause or value adjustment mechanism”, etc. What happens when existing contracts contain specific tax clauses that allows the parties to pass on any new taxes without changing the original contract price? Similarly, what happens to other clauses that allow certain reimbursable costs without affecting the original contract price for the services or goods provided? How will such changes be interpreted? Will it fall within the non reviewable contract exemption, or would it be outside? There are many more challenges taxpayers will face when dealing with this exemption. Way forward To avoid any disputes with the Royal Malaysian Customs Department, we would urge taxpayers to immediately bring up all their uncertainties around this issue to the authorities and obtain a ruling. This article is contributed by Thannees Tax Consulting Services Sdn Bhd managing director SM Thanneermalai (www.thannees.com).

contracts would not have anti cipated the expansion of the Sales and Service Tax (SST) and therefore not built in the necessary clauses to apply the additional taxes. When the announcements came out together with the guides on June 9, 2025, that was the first time taxpayers started understanding the impact of the expansion on their business. At that point, taxpayers were informed that they will be given some leeway via the “non-reviewable contracts” exemption for a period of 12 months to cushion them from the impact of the expanded SST on ongoing contracts. Is stamping really necessary? On June 29, 2025, a major surprise was thrown at taxpayers which curtailed many businesses from enjoying this temporary exemption for 12 months. The principal impediment which will prevent businesses from enjoying the 12 month non-reviewable contract exemption is a particular condition that states that only contracts that were stamped before June 9, 2025 will be able to enjoy the exemption. This exemption is only available for construction contracts, rental or leasing services contracts and financial services contracts. The requirement to have documents

stamping date, although the announcement was made on June 29, 2025, was intended as anti avoidance measure to prevent the abuse of this provision. The fear could have been on the basis that businesses would attempt to create new documents or modify existing ones to benefit from the exemption. Unfortunately, this can be an “overkill” because genuine transactions which have been entered into by the parties is effectively thrown out of the window. Genuine transactions that are unlikely to be litigated in court need not be stamped and these transactions will be barred from enjoying the exemption. The Stamp Act does not mandatorily require every written instrument to be stamped. It merely states that if you wish to have it stamped, you must send it for adjudication and seek an assessment. On this understanding, many taxpayers genuinely may not have stamped their agreements. Imposing the stamping requirement con dition as a prerequisite to benefit from the exemption appears to be contradictory to the commercial relationship of the parties of the contract.

Agrobank supports microentrepreneurs with AgroPintar PETALING JAYA: Agrobank has launched the Agro Pintar Niaga Programme (AgroPintar), an initiative designed to empower microentre preneurs through a combination of financing, i-Tekad grant matching and structured entrepreneurship training to help them manage and grow their businesses sustainably. Group president/CEO Tengku Datuk Ahmad Badli Shah Raja Hussin said, “AgroPintar is a holistic programme that offers not just financing and i-Tekad grant matching, but also essential modules on entrepre neurship and business ethics.

“It places strong emphasis on financial literacy, covering areas such as financial management, credit risk control and debt management. The ultimate goal is to enhance the competitiveness and decision-making capabilities of microentrepreneurs to help them make more effective business deci sions,” he added. Ahmad Badli Shah said Agrobank has allocated RM50 million to facilitate micro financing access through the programme, alongside an additional RM5 million in i-Tekad matching grants. “The programme will support microenterprises through business and contract farming financing schemes, aiming to benefit more than 4,000 qualified microentrepreneurs, particularly from low income communities.” “We believe this initiative will not only drive positive economic outcomes but also foster social development among microentre preneurs,” he said, adding that through structured guidance, participants will be equipped with the knowledge and tools to make sound financial and business decisions, ultimately improving their capacity to manage various aspects of their businesses efficiently. Agrobank will monitor the programme’s

Bank Negara Malaysia deputy governor Adnan Zaylani Mohamad Zahid (centre) launching the financial literacy video series, witnessed by Tengku Ahmad Badli Shah (right) and Sir Asai.

Education Network. The 12-episode series features popular social media influencer Sir Asai. This initiative is tailored to promote financial awareness among school students using fun and accessible content. It aims to instil healthy financial habits through the 3S approach – Spend, Save and Share – encouraging the younger generation to adopt responsible money management from an early age.

impact and effectiveness six months after participants join. The AgroPintar Programme is spearheaded by Agrobank’s Centre of Excellence and Microfinance Division, reflecting Agrobank’s ongoing commitment to empowering microentrepreneurs across Malaysia. At the same event, Agrobank also launched a financial literacy video series developed in collaboration with the Financial