Unlike Najib with quinoa, Anwar hardly eats avocados: PKR man
A PKR leader has defended Prime Minister Anwar Ibrahim over the impending sales and service tax (SST) expansion, dismissing comparisons with former prime minister Najib Abdul Razak.
In particular, Kuala Terengganu PKR division chief Azan Ismail took offence with Muda's recent comparison of Anwar's remarks on avocados with Najib's on quinoa, insisting that the alleged resemblance was 'not equivalent'.
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Malaysia Sun
an hour ago
- Malaysia Sun
Malaysian central bank launches digital asset innovation hub
Xinhua 17 Jun 2025, 17:45 GMT+10 KUALA LUMPUR, June 17 (Xinhua) -- The Malaysian central bank on Tuesday launched the Digital Asset Innovation Hub to stimulate financial innovation in a controlled environment for applicants to test new ideas and provide input to fine-tune regulatory and security frameworks. Bank Negara Malaysia (BNM) said that this is to support the development of digital assets and the application of leading financial technology in Malaysia. Malaysia's Prime Minister Anwar Ibrahim said in his keynote speech that the hub is a testament to Malaysia's commitment to ensure policy evolves alongside innovation. "The hub will serve as a catalyst for progress, enabling innovators to test use cases such as programmable payments, ringgit-backed stable coins and supply chain financing; unlocking new efficiencies across the financial system and the broader economy," he said.
![Revised SST could push property prices higher [BTTV]](/_next/image?url=https%3A%2F%2Fassets.nst.com.my%2Fassets%2FNST-Logo%402x.png%3Fid%3Db37a17055cb1ffea01f5&w=48&q=75){kind=small}
New Straits Times
an hour ago
- New Straits Times
Revised SST could push property prices higher [BTTV]
KUALA LUMPUR: Malaysia's property prices, especially in the commercial and industrial segments, are likely to rise as the revised Sales and Service Tax (SST), effective July 1, 2025, is set to increase construction and development costs. The sector may see some developers delaying project launches to reassess pricing strategies, safeguard profit margins, and re-evaluate overall project viability amid the evolving cost landscape. Olive Tree Property Consultants CEO Samuel Tan said the non-residential segment will likely bear the brunt of the tax hike, though broader ripple effects across the entire property market cannot be ruled out. Developers facing rising input costs are expected to pass these on to buyers, especially in commercial sectors like retail, office buildings, and industrial facilities, he told Business Times. Although residential properties are exempt from SST, Tan noted that indirect effects, such as shared infrastructure costs and inflation across a developer's portfolio, could still impact pricing in the housing segment. Under the revised SST framework, selected non-essential goods will be taxed at 5 per cent to 10 per cent, while construction services related to infrastructure, commercial, and industrial buildings, where taxable value exceeds RM1.5 million annually, will face a 6 per cent service tax. Tan warned that the SST's potential retrospective application could disrupt ongoing contracts, project timelines, and budgets, raising financial uncertainties. Tan urged the government to reconsider applying SST to the construction sector, which already bears multiple layers of taxation on materials, labour, and equipment. He also argued that the current timeline gives insufficient lead time for stakeholders to adapt. Tan suggested lowering the SST rate for construction services from 6 per cent to 4 per cent and limiting the tax to only the service portion of a project, excluding hardware and building materials. He also questioned the appropriateness of applying SST to construction, arguing that sales tax is meant for tangible goods sold by manufacturers, not services. "The construction sector involves labour and materials. Therefore, to impose SST on the construction sector is wrong. Construction is not providing a sale or service," he said. Tan highlighted that many pre-construction activities, like site clearing, planning, and regulatory approvals, already incur service taxes. Adding another layer risks double taxation, increasing project costs and ultimately burdening end purchasers. Residential exemptions and policy clarifications Housing and Local Government Minister Nga Kor Ming clarified on Sunday that residential properties sold under the Housing Development Act (HDA), including serviced apartments on commercial land intended for residential use, will be exempt from the revised SST. The exemption follows discussions with Finance Minister II Datuk Seri Amir Hamzah Azizan, in response to concerns from property developers about potential cascading tax effects. To prevent double taxation, the government will implement business-to-business (B2B) exemptions, ensuring that the service tax is applied only once in the transaction chain, Nga said, according to Bernama. The Finance Ministry also clarified that basic construction materials such as cement, sand, and aggregates will remain zero-rated. Of the 400 tariff codes for building materials, only eight will see a tax increase, affecting items like laminated glass, netting, and vats, representing just two per cent of all codes. Contractors may also separate material and service components in billing, ensuring SST applies solely to the service portion of the work. Nga reaffirmed the government's commitment to balancing fiscal reforms with housing affordability. Despite reassurances, analysts warned that the residential sector could see knock-on effects from higher non-residential construction costs. "For current commercial and industrial projects, developers may be locked into pre-agreed pricing and unable to shift the additional tax burden to buyers. But in future developments, cost transfers will depend on market demand," one analyst said. "In a weaker market, developers may absorb the added costs, compressing margins and delaying launches. In a stronger market, prices will likely be adjusted upward." Analysts also flagged a lack of clarity over how the SST will apply to existing contracts, leaving developers and contractors exposed to unexpected tax liabilities and project risks. "Without clear transitional guidelines, managing costs and contracts will become increasingly complex," said one expert. "Even if residential units remain tax-exempt, rising overall development costs may still push prices upward, especially in integrated or mixed-use projects." Malaysia's residential property market has been gradually stabilising over the past three years following pandemic-related disruptions and inflationary pressures. The market began to recover in 2023 after a sluggish 2022, with the national average home price rising by 3.3 per cent year-on-year to RM467,000, an increase of about RM15,000. The House Price Index (HPI) also showed positive momentum, with nationwide house prices growing by 3.2 per cent. Certain states outperformed the national average, with Negeri Sembilan posting the highest price growth at 6.5 per cent, followed by Johor at 6.2 per cent, suggesting rising demand and development beyond the Klang Valley. This uptrend was supported by improving market confidence, ongoing economic recovery, and renewed activity in both the primary and secondary markets. In the first half of 2024, the HPI reached 218.7 points, with the average home price edging up to RM471,918, a 0.9 per cent year-on-year increase. However, by year-end, the market began to show signs of cooling. The HPI reached about 222 points in Q4, with annual growth slowing to 1.4 per cent in December from 4.3 per cent in September. The slowdown was most notable in the high-rise and high-end segments in urban areas, where supply outpaced demand. In contrast, landed and suburban properties remained resilient, supported by sustained demand from families and owner-occupiers. As of early 2025, Malaysia's average home price stood at RM486,070, up 3 per cent from the beginning of 2024, indicating continued, albeit moderate, market stability. REHDA warns new SST will push up home prices The Real Estate and Housing Developers' Association (REHDA) Malaysia has raised concerns that the 6 per cent SST on construction services will raise developers' costs and likely lead to higher home prices. While acknowledging the Ministry of Finance's intention to boost government revenue through the revised SST structure, REHDA cautioned that the added tax burden could slow down the property sector. REHDA president Datuk Ir Ho Hon Sang said the association is still assessing the full impact, but the new SST could prompt developers to delay or revise projects, ultimately dampening market momentum. He noted that the industry already absorbs indirect taxes on materials and labour and warned that retroactive application of the SST could result in significant cost overruns. Contracts signed before the effective date should not be subject to the new tax. Developers may be forced to absorb costs, which is unsustainable, he said in a statement. Although residential and public housing projects are exempt, REHDA remains concerned about developments built on commercial land, especially serviced apartments within mixed-use projects. "In city centres, where residential units are often part of mixed developments due to land scarcity, subjecting these units to SST will inevitably lead to increased housing prices, ultimately impacting homebuyers who will have to bear the brunt," Ho said. He added that affordable housing schemes like Rumah Madani, Rumah Selangorku, and Rumah Mesra Rakyat may also be affected if located on commercial land. Moreover, some local authorities require commercial elements, such as shop lots, in strata residential developments. These, along with internal infrastructure, would also fall under the SST, further inflating costs. REHDA is urging the government to postpone the implementation, currently set to take effect in two weeks, and to consider a grace period until 2026. Many SME developers have yet to register with the Inland Revenue Board. A delay would provide them adequate time to comply, Ho said. Analysts: SST a negative surprise for the sector Maybank Investment Bank (Maybank IB) said the implementation of a 6 per cent SST on construction services is expected to weigh on property developers, particularly those with ongoing commercial and industrial projects that offer limited room to pass on rising costs. It cautions that for projects already sold or under construction, developers may be forced to absorb the additional tax burden, especially in cases where contracts include regulatory change clauses. This could lead to margin compression across various segments of the property development value chain, the bank said in a note. Maybank IB views the tax measure as a negative surprise for the sector and notes that it introduces further uncertainty at a time when the property market is already navigating soft demand and elevated costs. It highlighted that developers involved in data centre construction, such as Eco World Development Group Bhd (Eco World Malaysia) and Sime Darby Property Bhd (SD Property), could see project cost escalations that may erode internal rate of return (IRR). With data centres forming a strategic growth area for several developers, the added SST could reduce long-term profitability, the firm said. Moreover, Maybank IB said that developers with a significant exposure to investment properties such as malls could face dual pressure. It said that while the 8 per cent SST on rental income is typically borne by tenants, the ability to negotiate higher rents may be constrained in a subdued economic environment. Maybank IB also pointed out the lack of clarity around how the tax will be applied to ongoing contracts signed before 1 July 2025 but billed after that date. This ambiguity could further complicate financial planning and contract negotiations over the coming months. Developers may attempt to pass on the added costs in future or unsold projects. However, pricing power is likely to be limited by slower economic growth and cautious buyer sentiment, the bank said. In this context, it estimates a reduction of about 4 sen in the revised net asset value (RNAV) of Eco World Malaysia and SD Property due to increased construction costs associated with data centre projects. Despite the near-term headwinds, Maybank IB maintains a neutral stance on the overall property sector, pending further policy clarity. RHB Investment Bank Bhd believes the revised SST will have a limited overall impact on the property sector, thanks to sustained demand for industrial properties. In a research note, the bank said the ongoing US-China trade tensions and shifting global tariff policies are prompting more companies to relocate to Southeast Asia, benefiting industrial hubs like Iskandar Malaysia. "Sales of industrial properties as well as projects in Iskandar Malaysia remain strong year-to-date. Hence, although property companies will likely record a slight margin compression, the demand for industrial and commercial properties should stay healthy over the medium term," it said. RHB noted that the SST's inclusion of construction contracts and leasing income could slightly dent developers' profit margins. It said that developers with greater exposure to industrial and commercial segments are expected to bear higher costs, as contractors are likely to factor in the 6 per cent SST in future project bids. Projects already under construction will also face cost increases for remaining works. "Eventually, we expect developers to pass on the incremental costs to buyers, so new industrial and commercial property prices will likely be more expensive and market forces (demand and supply) will continue to play their role." MBAM: SST could strain construction sector The Master Builders Association Malaysia (MBAM) has urged the government to review the upcoming 6 per cent SST on construction services, warning that the move could severely strain cash flows and disrupt ongoing developments. The association said that the construction industry is already grappling with numerous financial burdens, including taxes on materials, labour, and equipment. With most contracts being fixed-price and time-bound, the imposition of SST, particularly if applied retrospectively, could lead to breaches of existing agreements, project delays, and escalating costs. The industry operates on tight margins and already bears statutory costs such as EPF contributions for foreign workers, CIDB levies, stamp duties, and HRD Corp contributions. Adding a new layer of tax at this stage could compromise project viability, MBAM said. To minimise disruption and ensure fair implementation, MBAM proposed several key measures. It urges the government to postpone SST application to new contracts signed after Jan 1, 2026, instead of July 1, 2025. The association also proposed reducing the tax rate from 6 per cent to 4 per cent and excluding the tax on ongoing projects to prevent unforeseen cost burdens on contractors bound by pre-agreed budgets. MBAM is also seeking that the government extend the exemption period for non-reviewable contracts from 12 to 24 months and expand the scope to include all contracts. Additionally, it is hoped that the government would limit SST to service elements only, excluding building materials and hardware, and align tax payments with certified progress claims rather than invoice dates, to better reflect actual work and ease liquidity issues. MBAM cautioned that most contractors are not financially equipped to shoulder these tax costs upfront, and doing so could derail projects or lead to insolvency. MBAM is also seeking that the government extend the exemption period for non-reviewable contracts from 12 to 24 months and expand the scope to include all contracts. Additionally, it is hoped that the government would limit SST to service elements only, excluding building materials and hardware, and align tax payments with certified progress claims rather than invoice dates, to better reflect actual work and ease liquidity issues. MBAM cautioned that most contractors are not financially equipped to shoulder these tax costs upfront, and doing so could derail projects or lead to insolvency.
Malaysiakini
an hour ago
- Malaysiakini
SST expansion 'not divine law', Anwar's aide says govt open to review
An aide to Prime Minister Anwar Ibrahim, in his capacity as finance minister, today said the government is open to reviewing the expanded sales and service tax (SST), which will take effect from July 1. Kamil Abdul Munim reportedly said the legislation is not 'divine law', and so while the new rates will continue to be enforced, future changes remain possible if necessary.
