Malaysia Retailers Association seeks SST waiver on commercial rentals to protect businesses, consumers
PETALING JAYA: The Malaysia Retailers Association (MRA) has urged the Ministry of Finance (Mof) to waive the planned 8% Sales and Service Tax (SST) on commercial rental and leasing services, scheduled to take effect on July 1.
Retail businesses across the country are already under immense pressure from a succession of cost increases, including but not limited to the minimum wage increase to RM1,700; electricity tariff hikes; stamp duty on employment contracts; fuel subsidy rationalisation; the SST rate hike from 6% to 8%; and the 10% sales tax on low-value imported goods, MRA said in a statement, adding that these are just a few examples of rising fixed operational costs.
'The full scope of burdens faced by retail businesses is much broader, but even these alone are already impacting business sustainability and bottom lines,' it added.
MRA said the additional 8% SST on commercial rentals – introduced without any consultation or engagement with the retail sector – adds further pressure.
'Rental is among the largest fixed costs for many businesses and this tax will push operating expenses even higher. It is unrealistic to expect retail businesses to absorb the full impact and many may have no choice but to pass these costs on to consumers – contributing to inflation and intensifying the rakyat's cost-of-living burden,' the association said.
Compounding these challenges, it said, is the growing uncertainty in the global economy, especially in light of the recent escalation in geopolitical tensions between Iran and Israel. This conflict has already begun affecting regional confidence, global commodity prices, and trade flows – making it an especially inappropriate time to introduce new tax burdens.
In light of these concerns, MRA strongly urged that a complete waiver of SST on commercial rental and leasing services or at minimum, defer implementation sine die, until macroeconomic and geopolitical conditions stabilise.
If implemented, the association urged that the SST should be shared fairly between landlords and tenants, rather than passed entirely to retail businesses.
It also urged that service charges and shared area fees should be excluded from the SST scope; the SST exemption threshold should be raised to RM2 million in annual sales to safeguard small and independent retail businesses; defer the SST on rentals until after Visit Malaysia Year 2026 to preserve industry stability and support tourism-linked growth and introduce the SST gradually, starting at 3% and increasing progressively to 8% over five years.
MRA said that retail businesses play a vital role in domestic economic growth and employment and thus it is critical that policies impacting this sector are implemented with transparency, fairness and proper stakeholder engagement.
MRA said it welcomes further discussion with MoF to find a balanced and sustainable approach that supports both businesses and consumers.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Sun
21 minutes ago
- The Sun
Two retirees lose over RM1m to online investment scams
GEORGE TOWN: Two retirees lost over RM1 million after falling victim to online investment scams recently, according to Penang police. Penang police chief Datuk Hamzah Ahmad said in a statement that in the first case, the Seberang Perai Tengah District Police Headquarters received a report from a 55-year-old man on June 12, alleging that he had been scammed by an online investment company for RM827,120. 'In early April, the victim came across an investment advertisement on Facebook promising high returns and subsequently got in touch with a WhatsApp. 'The victim was promised a seven per cent return on each investment made,' he said, adding that the man was told to download the company's app to register as a member and invest through the platform. Hamzah said the victim made 22 fund transfers into six different company accounts between April 19 and May 26. 'He realised he had been scammed after being unable to withdraw profits totalling RM23,241,952 as shown on the investment app and subsequently lodged a police report,' he said. In a separate case, he stated that a 56-year-old retired factory technician lost RM321,250 after falling victim to another online investment scam, adding that the victim lodged a police report on June 12 at the Seberang Perai Utara District Police Headquarters. Hamzah stated that around December of last year, the victim came across an investment advertisement on Instagram that promised high returns. He then contacted a female suspect via WhatsApp, who promised a 30 per cent return within three months. He said that on March 21, the victim made the first fund transfer of RM20,000 through the company's app, and within less than three months, he received RM14,150 in profits. 'He made 11 additional fund transfers between March 27 and June 3 into four different company accounts linked to the scheme, but realised he had been scammed after he could not withdraw RM280,000 in purported profits and was instead asked by the suspect to pay an RM120,000 withdrawal fee,' he added. He said investigations are ongoing, and both cases are classified under Section 420 of the Penal Code for cheating.
The Star
23 minutes ago
- The Star
Hairdressers in the dark over expanded SST rules
Grooming in progress: A traditional indian barber attending to a customer in Kepala Batas, Penang. — ZHAFARAN NASIB/The Star BUTTERWORTH: Barbers and hair salon operators here are in the dark over the expanded Sales and Service Tax (SST), with some raising concerns over compliance and potential cost implications upon its implementation. Barbershop operator Rashidan Wan Hamid, 56, only learned about the expanded SST through news reports and conversations with industry peers. He said business operating costs would be affected if barbershops were subject to the expanded tax. ALSO READ: It's an unkind cut, say hairdressers 'I foresee an impact on both my services and expenses. If the service tax is imposed, we will have to reassess everything, from pricing to profit margins. 'Naturally, business will slow down if prices go up because customers may cut back on grooming services,' he said, adding that any form of taxation will inevitably affect small traders. Rashidan urged the government to review the implementation and consider postponing it until the economy improves. Barbershop owner Muhammad Zulfaqaruddin Mohd Shaiful, 22, said he was unsure how the expanded SST would affect the industry. He said there was a lack of clarity on how the tax would be applied and whether barbershops like his would fall under its scope. 'If the tax is imposed, it will impact my operations and service pricing,' he said, adding that rising costs could affect customer retention. As a young entrepreneur still building his customer base, Muhammad Zulfaqaruddin said affordability is key to retaining clients in a competitive market. He added that barbershops often operate on thin profit margins, and absorbing the additional cost could make it harder for smaller operators like him to stay competitive. For now, he will run his business as usual and follow any instructions from the government regarding the SST. Female Muslim spa and hair salon operator Aufa Insyirah Mohamad Halimi, 25, said her business has yet to receive any instructions regarding the imposition of SST. 'At the moment, we are operating as usual. I am uncertain whether my business falls under the expanded tax category,' she said. However, Aufa Insyirah said that if her business is required to comply, service prices would likely change based on the total value of treatments customers receive. 'Service prices won't be increased unless there is a rise in material costs or a revision of the minimum wage,' she added. The reviewed and expanded SST rates, as announced in Budget 2025, will come into effect on July 1. The Finance Ministry said in a statement on June 9 that the measure is to strengthen the country's fiscal position by increasing revenue and broadening the tax base. The existing tax scope will be expanded to cover six types of services: rental or leasing, construction work, financial, private healthcare, education and beauty.
The Star
23 minutes ago
- The Star
It's an unkind cut, say hairdressers
Our services are a necessity and not a luxury, claim industry players PETALING JAYA: Hairdressing and salon industry players have appealed to the government to reconsider imposing the expanded 8% Sales and Service Tax (SST) on their services, which they deem a necessity and not a luxury. United Asian Hairdressers Association (UAHA) president Dr Michael Poh said hairdressing remains a basic need and personal hygiene-related service for many, including those seeking to treat scalp problems. ALSO READ: Hairdressers in the dark over expanded SST rules 'Taxing hairdressing as though it is a luxury service is not only inappropriate, but also unfairly affects both operators and consumers. 'We kindly urge the government to reconsider and exempt hairdressing services to protect this fragile yet essential industry, and prevent further financial strain on micro-entrepreneurs as well as the people they serve. 'Placing it under the same tax category as other luxury or high-margin services does not reflect the economic realities faced by most in our sector,' he told The Star. Poh said a letter by UAHA and other industry players was sent to Prime Minister Datuk Seri Anwar Ibrahim and the Finance Ministry on June 12 to express their concern regarding the imposition of the 8% tax. The stakeholders include the Malaysian Hairdressing Association, Bumiputera Hairdressers Association, Malaysian Indian Hairstylist Empowerment Association, Persatuan Kemahiran Wanita Selangor and Branding Association of Malaysia. The Federation of Malaysian Business Associations has also come up with a petition form for its stakeholders appealing to Finance Minister II Datuk Seri Amir Hamzah Azizan for the postponement and reconsideration of the SST expansion. According to the Finance Ministry, effective July 1, an 8% SST will be applied to all hairdressing services, which are deemed non-essential services, for businesses with an annual value exceeding RM500,000. This includes services provided by salons and hairdressers, but not the sale of hair products. Poh said that given the current situation for financially-strained businesses operating in malls with high rentals, periodic renovations and overhead costs, their average turnover ranges between RM650,000 and RM700,000, which is barely enough to break even. 'In the long run, those operating in shopping malls will have to close down because they are not friendly to the beauty industry. This is an important thing that must be considered. 'If they (the government) want to tax, then use the Goods and Service Tax (GST) of 3% or 6%, which is easier for us, or reduce (the SST) from 8% to 3% so that we can ensure our survival,' he said. Syiling Unisex Hair Salon owner Mogana Chinnathamby said smaller local barbers or salon owners with revenues below the threshold can continue without SST, but many salons in malls or premium areas typically exceed that limit and have started adjusting prices. 'As a responsible salon operator, we fully support tax transparency and compliance. 'If our revenue meets the threshold, we will implement the SST accordingly and ensure that it is clearly communicated to our customers with no hidden or unexpected charges. 'But the majority of customers may reduce frequency from monthly to every two months to cope with the rising costs, and I believe there will be some initial pushback too from customers,' said Mogana, who is also Kuala Lumpur and Selangor Indian Chamber of Commerce and Industry Honorary secretary-general. She hopes the authorities will continue engaging with industry players to review classifications that affect essential services like haircuts, especially in the interest of affordability for the public. Malaysian Indian Hair Dressing Saloon Owners Association honorary secretary-general Jeyakumar Manokaran said they will be meeting with their members to discuss the implementation of the SST. He acknowledged that the 8% SST will eventually be passed on to consumers. 'But we have to bear in mind that they are already being burdened by a lot of other increases in cost of living. 'So, we have to see whether they can eventually afford it. 'The other matter is that the Indian barbers and salons are mostly frequented by the B40 group,' he noted. As such, he hopes the government will reconsider imposing the SST expansion.
