KUALA LUMPUR, October 18 — The federal government is expanding the scope of the Sales and Service Tax (SST) to further improve the nation's tax revenue in the Budget 2025.
The expansion will be implemented starting May 1, 2025.
Here are the key points from Prime Minister Datuk Seri Anwar Ibrahim’s speech on how this will work:
- The sales tax will be increase on non-essential items such as imported premium goods like salmon and avocado.
- The sales tax exemption will be maintained for basic food items.
Simultaneously, the service tax will be expanded to now include commercial service transactions between businesses (B2B) that were previously exempted.
These will join sectors already covered such as
- Manufacturers
- Importers
- Logistics and delivery services
- E-platforms
However, the government will conduct engagement sessions with stakeholders and relevant industries before finalising the scope of expansion and the new tax rates.
Who will benefit from the tax expansion?
Part of the revenue will be used to further improve cash assistance to the people.
It will also go to improve the quality of healthcare and educational services.
In May 2024, the Malaysian government increased the SST rate from 6 per cent to 8 per cent across various sectors, including finance and leisure, effective from March 1, 2024.
