FMM urges govt to delay SST expansion, warns of cost and inflation risks
'The untimely implementation of the expanded scope of taxes will exert inflationary pressure… businesses already grappling with rising costs may have no choice but to pass these additional burdens on to consumers,' said FMM president Tan Sri Datuk Soh Thian Lai.
The new sales tax orders will subject 4,806 tariff lines to a 5% tax, including machinery, equipment, and technical tools used in manufacturing.
Only 359 Harmonised System (HS) codes remain exempt or zero-rated – meaning about 97% of goods will be taxed.
FMM warned that taxing capital goods like machinery will raise investment costs and delay industrial upgrades.
Although no penalties will be imposed until Dec 31, businesses have under three weeks to adjust systems and pricing.
The expanded 8% service tax now covers leasing, construction, education, healthcare, and financial services.
FMM estimates this could increase annual costs by RM24,000 to RM60,000 per rented premise.
'Clearer guidelines and a broader exemption list are urgently needed,' said Soh, adding that manufacturers offering mixed goods and services face implementation uncertainty.
FMM also reiterated its call to reinstate GST, calling it a more transparent and efficient tax model that avoids the cascading cost effect of SST.
'Instead of widening a narrow and cascading tax system… GST offers a more efficient, transparent and broad-based solution,' Soh said. –TMR
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Malaysian Reserve
2 hours ago
- Malaysian Reserve
50 years on, Malakoff balances energy security with cleaner goals
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The Star
2 days ago
- The Star
KCCCI president calls for balanced economic policies amid business challenges
KLANG: There is a need to consider the overall health of businesses when implementing economic measures, such as taxing the rich and protecting the vulnerable, says Klang Chinese Chamber of Commerce and Industry (KCCCI) president Datuk Jeffrey Tan. The reason was that businesses were the foundation of national fiscal strength and social well-being, he said at the chamber's 79th anniversary dinner on Friday night (Aug 8). 'We urge the government to fully consider the realities faced by the business community, especially amid current economic uncertainties. 'We hope that policies do not add to the burden on businesses,'' said Tan in his address. He added that some issues voiced by KCCCI members included the multi-tier levy system for foreign workers, the 2% Employees Provident Fund contribution for employers with foreign workers, and the rationalisation of the RON95 fuel subsidy. 'We recommend deferring these policies until the economy stabilises and business confidence returns,'' said Tan. He added that the members also hoped for a review of the Sales and Services Tax (SST) expansion. Tan suggested that the government consider reducing the SST rate to 4%. Currently, the SST ranges from 5% or 10% for sales and 6% to 8% for services. 'In the long run, we continue to believe the Goods and Services Tax (GST) is a fairer, more transparent, and sustainable taxation system, and it is worth re-evaluating and enhancing its implementation in the future,'' he said. Meanwhile, Tan said that Malaysia, in the light of the 19% tariff imposed by the United States, should diversify and reduce reliance on any single market. The event was also attended by representatives of various Chinese chambers of commerce, elected officials, local council members, and representatives from foreign missions.
