Now that we have a new government, a new Finance Minister, a new Youth & Sports Minister and this Malaysia Baru, now is the time that we should also have a new import tax and SST for bicycles, specifically mountain bikes.
For years mountain bikers have loosely (I say loosely because some never buy anything online or don’t run a bicycle shop) known that buying anything from overseas, Malaysian Kastam’s will slap on a high import tax as soon as it arrives here. Depending on the item that you’ve purchased, by the time you payoff the taxes that item probably would cost 50% more than what you expected to save. Some do get luckly and never get taxed even if they purchased a frame, however in the past few years chances of not getting stopped by Kastam is as small as seeing Patawi in Kiara (he does ride Kiara, he just never tell you when he’s back).
Surely it doesn’t affect me
Now you might be thinking “That’s why I get my stuff at local bike shops, rather than Online”, well think again. It has been widely known by many mountain biker oldies that prices for some parts at bike shops are often inflated by more than 40% as compared to prices overseas. If you’re a Shimano or SRAM guy this might not apply to you (however it is still debatable how much cheaper these brands could be), but if you’re the guy who is willing to try the latest and best in the market now – then you better pay up.
Now I’ll admit some distributors knows this, they do find ways to get around the high import taxes and try to reduce the price to a more affordable level. However it does not apply to every mountain bike brand out there. Depending how the brand is operated, manufactured, distributed, custom coded and existing bilateral trade agreements, some brands are easier than others to bring in and navigate the tricky import duties. This results in a limited selection of brands for us to choose from locally. Malaysian mountain bikers being brand-conscious that they are, has always demanded other brands to be brought into the local market so they can get their hands on. I know this because we get requests to bring in brands every week.
Let’s be clear on one thing, these import duties only apply to a single category of the cycling fraternity – mountain bikes. Yet mountain bikers are the largest community in Malaysia. It shows in the long list of jamboree rides organized every month, night rides that are usually organized by fat tire tire mountain bikers, car free sundays and every foreign worker has at least been a mountain biker once while working in New Malaysia. However economically mountain bikes have always been the anak tiri of the larger bicycle family.
Where’s the proof?
All things coming into the country have to pass thru Kastam Malaysia and Kastam knows if a product can be slap with import duties base on the product’s Harmonized Commodity Description and Coding System (HS Code). They simply look up the code in their Great Book of Kastam duties (now there is an online version), and they instantly know the percentage at how much import duties needs to be charge on that particular product.
Clearly from the table road bikes (gravel bikes, TT bikes… anything with a drop down bar) and kids bikes (BMX too) has zero import duties. Mountain bikes (and also maybe unicycle, recumbent and tandems 🤷🏼♂️) falls under Other Bicycles which has an import duties of 25%! This is just the Import Duties, with the upcoming SST you’ll need to add additional Sales Tax on top of the Import Duties – it was the same during the short lived GST where an additional 6% GST had to be added on top of the Import duties. So the cumulative taxes would be over 30%, realistically wipping out any margins for the product itself.
This hellish import duties don’t just apply to complete bikes, but trickles down to the smallest part too. Take the often underated but important part of a mountain bike wheel – nipples. These small harmless and unassuming part of your wheel has a whopping 30% import duties – are we trying to protect our bicycle nipple industry? Need a fancy saddle which fits your huge adult bum – well that would be an additional 25% of taxes. Need a spanking new riser bar for your DH rig – prepare to pay extra 25% for it.
Look I get it high import duties are there to protect a local industry that might suffer from imports of the same item. But why does our import duties only affect a category of cycling beyond road and children bikes? Shimano has a factory in Johor that produces mountain bike components and some road components, but they don’t produce saddles, nipple or a handlebar (or do they)? So who are we trying to protect here… NO ONE! Who suffers? – Mountain bikers, weekly jamboree warriors and fat bike enthusiast.
Let’s make it even
Our hope for the New Malaysia government is to understand our economic concerns. Since every single minister in the New Malaysia seems to exude coolness and willing to chat with the common people, I welcome them to come over to the shop and let’s have a chat about bikes. But for now let’s start the ball rolling by zeroing import duties in the Other Bicycle category, effectively making any bicycle and parts equal to Road and Children bicycle category with 0% import duties.
More importantly our cycling friendly and fellow mountain biker Finance Minister, would understand this article better than anyone. And since Malaysian Kastam is under his Ministry, I’m seriously pinning my hopes on him to change this draconian import duties that has befallen on mountain bikers in Malaysia. Since he’s already said SST might be at 10%, so the only logical way forward is to simply cancelling import duties for Other Bicycle category. So saudara YB Lim Guan Eng, I’ve exposed the suffering of Malaysian mountain bikers care to help out a fellow mountain biker out 😀