KUALA LUMPUR, March 18 — Malaysia’s customs agency hopes to reach an agreement soon after the London Metal Exchange threatened to stop registering metal in the country if a new tax affects its two bonded zones there, local media reported today.
The Star newspaper cited Subromaniam Tholasy, director of the custom agency’s tax unit, as saying his department would be looking into the matter to come up with an amicable solution soon.
The world’s top metals market has been seeking details on how a new Malaysian goods and services tax, due to come into effect April 1, will impact metal stored in LME warehouses in Johor and Port Klang, the LME said on Monday.
If it cannot get confirmation by then that transactions and storage charges will not be taxed, the LME will stop issuing warrants at the two Malaysian locations from July 1, it said in a notice to members. That would prevent new metal at the warehouses from being used to back LME contracts.
Malaysia is a major storage point for LME metals, holding more than 420,000 tonnes, including nearly half of the LME’s nickel stocks, 85 per cent of its tin, a third of its lead and almost a fifth of its copper inventories. — Reuters
