KUALA LUMPUR, December 31 – Deputy Finance Minister Lim Hui Ying clarified that the imposition of service tax on traditional Chinese medicine services is not a sudden decision but has been in effect since 2018. She stated that the policy was part of the 2018 guidelines on service tax and has been consistent through the implementation of the Goods and Services Tax (GST) and the Sales and Service Tax (SST).
Traditional Chinese medicine, along with traditional Malay and Indian medicine, falls under a taxable category, while modern medicine is classified separately. Lim explained that the service tax applies to taxable services exceeding RM500,000 annually. Lim addressed concerns about the tax on traditional medicine and emphasized that the service tax would only be imposed on the services provided and not on the cost of the medicine itself. She assured that the government understands public worries and stated her intention to meet with industry players to listen to their views.
Lim added that representatives from the Customs Department and the Finance Ministry’s tax division would be invited to explain the tax collection mechanism and address concerns from industry players. The service tax is currently at 6%, with plans to increase it to 8% from March 1, 2024. MCA president Datuk Seri Wee Ka Siong had previously urged the government not to discriminate against traditional and complementary medicine (TCM), seeking SST exemption for TCM similar to modern medicine.
