PUTRAJAYA, February 29 — Malaysia’s Ministry of Finance (MoF) has released details of its tax reform measures, which include raising the sales and service tax (SST) from 6% to 8%, effective March 1 this year, with an estimated additional revenue of RM3 billion. The adjustment primarily targets discretionary activities and business-to-business services, aiming to shield the public from higher consumption taxes on essential services like food and beverage, telecommunications, parking, and logistics.
Senator Datuk Seri Amir Hamzah Azizan, Minister of Finance II, emphasized the need for a balanced approach to tax reform, considering both revenue enhancement and relieving the public of excessive burdens. The move aligns with the government’s goal of broadening the tax base to strengthen the national fiscal foundation under the Madani Economy framework, while maintaining prudent spending, reducing leakages, and attracting foreign direct investment (FDI).
The revised tax regulations exempt almost 85% of electricity users from the service tax, applicable only to electricity usage exceeding 600kWh, and also exclude water supply services. The Ministry assures that the modest two-percentage-point increase in tax rate for selected services will not lead to significant price hikes or economic shocks, with essential services like food and beverage, telecommunications, and parking remaining taxed at 6%. The expanded tax coverage aims to standardize tax rates across various service sectors, promoting fairness and consi
