PUTRAJAYA, June 23 — Prime Minister Datuk Seri Anwar Ibrahim has defended the government’s decision to expand the Sales and Services Tax (SST), assuring Malaysians that the move is intended to channel more resources toward public welfare.
Speaking at the Ministry of Finance’s monthly assembly, Anwar said the savings from subsidy rationalisation and increased tax revenue will directly support essential sectors such as education, healthcare, and targeted cash aid programmes like STR and SARA, which collectively benefit nine million recipients.
Anwar explained that untargeted subsidies have long benefited high-income groups and even non-citizens, but the government is now focused on ensuring that assistance reaches those in genuine need. “We collect taxes to return them to the people,” he said, emphasising the government’s responsibility to manage funds efficiently.
He noted that subsidies previously extended to the wealthy are being removed, saving RM4 billion, which will instead be redirected to schools and hospitals. Meanwhile, the Ministry of Finance clarified that refined sugar remains exempt from SST under the revised tax structure effective July 1, 2025.
Although raw sugar will be taxed at 5 per cent, manufacturers like MSM Malaysia Holdings Bhd are eligible for exemptions to avoid passing costs to consumers.
The ministry reaffirmed that essential goods such as sugar, salt, rice, vegetables, and poultry remain tax-free under the Madani Government’s targeted approach, aiming to protect the public from price hikes amid ongoing economic recovery.
