Price changes in face masks suppress pharmacies’ margin
Topeng / Amin

FMM suggests govt exempt import duty and sales tax on main components in manufacturing of 3-ply face masks

by SHAHEERA AZNAM SHAH/ pic by MUHD AMIN NAHARUL

LOCAL pharmacies are at a crossroad after the government introduced further price reduction for three-ply face masks.

The price reduction came after the mandatory ruling of its usage in crowded places and public transportation — enforced starting Aug 1.

The new price, gazetted on Tuesday, was capped at RM1 per unit or RM50 per box for retail and 95 sen per unit or RM47.50 per box for wholesale beginning tomorrow.

This is the second time the government has amended the ceiling price of three-ply face masks this year under the Price Control and Anti-Profiteering Act 2011.

However, the ceiling price has been regulated several times. On March 21, the government fixed the face masks to be sold at RM100 per box or RM2 per unit, an increase from 80 sen a piece earlier. The price was gazetted later in the month to be RM75 and RM1.50 per box and piece respectively.

With the even lower price, pharmacies are forced to bear a loss close to RM25,000 for every 1,000 boxes in their stockpiles due to the sudden reduction, said Malaysian Pharmaceutical Society president Amrahi Buang.

“There is a lack of representatives from independent pharmacies in the discussion of the prices at the law-making level.

“We are not against the price reduction as we are also consumers. However, without enough time for us to use up our stockholdings with the previous price, the pharmacies will be at loss,” he told The Malaysian Reserve (TMR).

With about a 30% reduction in the price, pharmacies concerned may withhold stocks, while manufacturers halt production to keep losses minimal.

“Pharmacies are left puzzled as selling the face masks at the new price will incur further losses,” Amrahi said.

The demand for face masks has surged after the government made it mandatory to wear in crowded places and public transportation beginning August.

The country went through a supply shortage in March when the number of Covid-19 infections began to soar, which forced pharmacists and the government to seek foreign suppliers due to the overwhelming demand, resulting in 10 million surgical masks imported from China.

Yesterday, Domestic Trade and Consumer Affairs Minister Datuk Alexander Nanta Linggi hinted at further reduction to as low as 70 sen a piece to make the item more affordable to consumers.

Under the Price Control and Anti-Profiteering Act, parties who are found guilty of selling the masks above the ceiling price will be fined RM500,000 or compounded RM250,000, while individuals will be fined RM100,000 or face three-year imprisonment, or compounded RM50,000.

The Federation of Malaysian Manufacturers (FMM) has raised concerns over the import duty and sales tax imposed on the main components in the manufacturing of the three-ply face masks.

“For the local manufacturers, key raw materials for the three-ply face masks, which include polypropylene non-woven materials, metal nose wire and elastic earloop, are currently attracting import duty of 20% and sales tax of 10%.

“Although raw materials for face masks are generally sourced locally, much of these inputs are imported from China, India, Ireland and the United Arab Emirates,” its president Tan Sri Soh Thian Lye told TMR.

Soh added that the government should exempt the import duty and sales tax on all input materials for the local manufacturing of face masks to encourage local production and regulate the manufacturers’ operating margin.