Malaysia to introduce revised sales tax, expand services tax from July 1
A sales tax rate of 5 to 10 per cent will be imposed on non-essential and luxury goods, while the services tax will be expanded to include several sectors. PHOTO: AFP
KUALA LUMPUR - Malaysia will revise its sales tax rate and also widen the scope of its services tax from July 1, the finance ministry said on June 9, as the government looks to boost its revenue and strengthen its fiscal position.
A sales tax rate of 5 to 10 per cent will be imposed on non-essential and luxury goods, such as king crab, salmon, imported fruits, racing bicycles, and antique artworks, the ministry said in a statement.
The services tax will be expanded to include property rentals or leasing, construction, financial services, private healthcare, education and beauty services, it said.
'This measure aims to strengthen the country's fiscal position by increasing revenue and broadening the tax base to improve the quality of the social safety net without burdening a majority of the people,' the ministry said.
Prime Minister Anwar Ibrahim had said during the government's budget announcement last October that the sales and services tax would be progressively expanded. The expansion of the tax was delayed from its initial implementation in May amid concerns from businesses.
The Federation of Malaysian Manufacturers had in April urged the government to defer the expansion of the scope of the tax, in light of tariff and global trade uncertainties that it said could raise operating costs this year.
The finance ministry said there will be selected exemptions for the tax to avoid double taxation and to ensure that Malaysian nationals were not taxed for certain essential services. Penalties against companies for non-compliance with the tax's legal requirements will not be imposed until December 31, the ministry added. REUTERS
Join ST's Telegram channel and get the latest breaking news delivered to you.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Straits Times
39 minutes ago
- Straits Times
How a Singaporean in the US is grappling with pricey Hainanese chicken rice under Trump's tariffs
Shelves at the local ShopRite grocery store. Spring season means more imported fresh fruit from Latin American markets at relatively cheap prices. PHOTO: GRACE NG Commentary How a Singaporean in the US is grappling with pricey Hainanese chicken rice under Trump's tariffs – There is one catastrophic scenario I worry about with US President Donald Trump's second term in office: bad food. I had read about the unimpressive cuisine associated with Mr Trump's establishments, from Thanksgiving platters at his Mar-a-Lago club in Florida that resembled frozen TV dinners to gala dishes deemed worse than budget airline food by crypto investors in the President's meme coin. But I was not chuckling during a recent meal at a cafeteria in Pennsylvania, which served pale yellow turds. 'Eggs,' pronounced the server. As I stared in confusion, he whispered: 'Powdered eggs with some tofu. Good stuff – soybeans made in the USA .' This unpalatable swop of protein sources was accepted without controversy – possibly because I was attending an Asian church retreat, where tolerance for tofu and austerity is not in short supply. Expectations of egg substitution may also have been baked into consumers' expectations, since egg prices in the US have risen about 49 per cent in one year and could get nudged up further by tariffs on imports from markets such as Brazil, Mexico and Turkey. But it was also a sign that all of us, from the sheepish server to second-generation Asian-Americans and relative newcomers such as myself, have accepted that higher tariffs and wider price substitution are an unavoidable part of our foreseeable future. Price substitution, as I explained to my two little kids, inevitably takes place when the price of Hainanese chicken rice goes up by about US$3 (S$3.90) to US$15.99 on my food delivery app. So now, instead of that beloved Singaporean dish, we are ordering invented-in-America General Tso chicken with grown-in-America white rice for US$11.99, which increased in price by only $1. Alas, the only lesson learnt about economic trade-offs was this: saving US$4 was not worth the wailing and flailing that ensued. Taking stock of tariffs So we set off for the nearby Asian grocery store, which is the closest to a Sheng Siong supermarket I can find, to stock up on Prima Taste Fragrant Chicken Rice Paste for US$8.99 per packet. We were struck by the rows of unevenly empty shelves that reflect the tariff scenario analyses hoarders before me had undertaken. Hong Kong love letter rolls, Chengdu hotpot paste and Want Want rice crackers were wiped out. Apparently, they sold out soon after US tariffs on China goods reached as high as 145 per cent. But even after those rates were lowered to 10 per cent after a bilateral meeting in Geneva on May 12, restocking was slow. Empty shelves are seen as a woman shops for items at a Dollar Tree store on April 28 in Alhambra, California. PHOTO: AFP It was anyone's guess when they would get restocked, the store owner said in Cantonese. Some small businesses are still waiting for shipments, since larger US companies have rushed to stockpile goods to hedge against tariff volatility. The de minimis exemption for low-value imports from China had expired in May. Fortunately for my young kids, Khong Guan biscuits are fully stocked. That is not surprising, because tariffs of just 10 per cent were imposed on Singapore even before the Trump administration placed a 90-day pause – which expires on July 8 – on reciprocal tariffs, maintaining an interim baseline of 10 per cent on imports. We are also counting our blessings that most food prices have not returned to pandemic peaks. Bulk donations of baked ziti – using imported pasta and cheese – to the local food pantry, for example, still cost a third less than during supply chain snarls in 2021 . Delay, pre-empt or panic buy? Playground chit-chat among parents in our community has recently shifted away from whether to take the 'Wait till Eighth' pledge to hold off giving smartphones to our 'anxious generation' of kids until they are in eighth grade, or 14 years old. We now joke that tariffs of 25 per cent on Apple products might get the parents more eager to sign on, since they might have to wait until their kids are in the eighth grade for iPhones to become affordable again. There is also concern that new 50 per cent tariffs on metal could further hike the price of cars, home renovations, lawn tools and canned drinks. On June 4, tariffs on steel and aluminium imports were doubled to 50 per cent. This applies to nearly all trading partners, except the UK, which secured an exemption. The choice of whether to allocate more budget to pre-emptively stock up on canned beer or school supplies, both of which look likely to get more expensive, can be an agonising one for harried parents. A friend's garage sale: Nintendo and game consoles snapped up, while clothes remain. PHOTO: GRACE NG Coping mechanisms: Hacks and swops Many people wait until the 'back-to-school' sales tax holidays in August and spend an hour or two in stores hunting for, say, 18 highly specific items, from Crayola 12-count markers to composition books with marbled black covers – and some beer to tide them over the tedium. Until 2025 , I just paid a premium for pre-packaged school supply kits to save time and hassle. A few days ago, I experimented with adapting a writer's 'AI (artificial intelligence) Grocery Assistant'. Using Google AI chatbot Gemini and Google Shopping , it found the lowest prices for school supplies across retailers such as Walmart and Target, generated links and automatically added the items to shopping carts. The Gemini-generated shopping list saved me about US$12 compared with buying a kit. Not shabby at all for me, but not enough to buy certain toys. A Jurassic World Tyrannosaurus rex plastic toy increased to US$55 on May 21 from US$39.92 on April 27, according to photos circulated by Walmart workers about price hikes of as much as 38 per cent. The photos surfaced in my WhatsApp chat group with a few Singaporeans living in the US. 'Alamak, my boy just started watching Jurassic World cartoons,' moaned one of them. 'That means very soon he will want to buy every dino in the show! Should I start hunting for dinos at the garage sales first or on eBay?' With so much uncertainty around where tariffs will eventually land, most of our talk is just 'swop talk' rather than action plans. We are swopping notes with our families back in Singapore about how to deal with elevated costs of imported foods and how to buy quality second-hand items online without being scammed. Shelves at the Asian supermarket, with Khong Guan biscuits fully stocked. PHOTO: GRACE NG Christmas uncertainty: Naughty or nice prices? The art of price substitution can get one only so far, with limited visibility on where tariff levels will head to after July 8. It is simply impossible to budget for or plan too many purchases ahead. All the supermarkets in my area, from Walmart to Trader Joe's and German-owned discount chains, such as Lidl and Aldi, look fully stocked. But as a May 7 Bloomberg headline warned: Empty Store Shelves Might Be Coming Sooner Than You Think. One spectre is potential shortages of Halloween and Christmas products. The tariffs had earlier choked off production of those festive items in Chinese manufacturing hubs such as Yiwu, but the pause reportedly spurred a partial filling of US orders. But with some of these Chinese factories already diverting goods to European and African buyers, doubts remain about whether the procurement elves for Halloween costumes and Christmas toys can fully fulfil American wish lists in 2025 – and at what spooky price. Thankfully, my kids, who are Star Wars Lego aficionados , are still little enough to be content with makeshift outfits. After watching hacks shared by YouTube creators who specialise in Lego modifications, they 'customised' Star Wars-themed Lego mini-figures with acrylic markers, spare parts and capes made out of red balloons. That saved them the US$11.99 for a custom mini-figure sold on Party supplies at the family-owned Ollin Party Store in the San Fernando Valley area of Los Angeles, California on April 16. PHOTO: AFP Reinvention to cope with change The ingenuity of the YouTube creators reminded me that the sanest response to unpredictable tariffs may be to train our energies not just on price substitution, but also on reinventing ways to meet immutable consumer priorities: cheap goods, speedy access, diverse choices and personalised offerings. Amazon founder Jeff Bezos was quoted as saying: 'People always ask me what's going to change. But what's more important is what's not going to change. 'You can never imagine a world in which consumers don't want cheap prices, fast shipping and big selection. It's impossible to imagine a world where people don't want that. Because of that, you can put so much confidence into investing in those things, knowing they'll always be relevant in the future.' One can only hope that entrepreneurs, communities and families can leverage new ideas, tools and technologies fast enough to outpace price shocks. I am holding my breath on when the tariff turmoil will settle. But in a nod to what is unchanging – our love of Singaporean food – I will be learning how to make decent chicken rice and kaya with egg substitutes. Grace Ng is a Singaporean writer in New Jersey and a former Straits Times China correspondent. Join ST's Telegram channel and get the latest breaking news delivered to you.
Straits Times
an hour ago
- Straits Times
British and Spanish PMs agree Gibraltar deal unlocks 'huge opportunity'
Spain's Prime Minister Pedro Sanchez attends a bilateral meeting with Britain's Prime Minister Keir Starmer during the European Political Community meeting at Blenheim Palace in Woodstock, Britain, Thursday, July 18, 2024. Kin Cheung/Pool via REUTERS/File Photo LONDON - British Prime Minister Keir Starmer, in a phone call with Spanish Prime Minister Pedro Sanchez, agreed that a deal on the status of Gibraltar unlocked the opportunity for both countries to advance bilateral relationship, Starmer's office said on Wednesday. "Prime Minister Sánchez congratulated the Prime Minister on his leadership," a Downing Street spokesperson said. "Both leaders also agreed that this development unlocks huge opportunity to advance the bilateral relationship between the UK and Spain, on behalf of the British and Spanish people." Starmer also spoke to Chief Minister of Gibraltar Fabian Picardo, the spokesperson said, adding that they both agreed the agreement would allow them to "plan for the long-term while protecting British sovereignty." REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
Straits Times
4 hours ago
- Straits Times
Commerce Secretary Lutnick says US tariff levels on China won't change after deal
US Secretary of Commerce Howard Lutnick says China has agreed to examine how it can do more business with the US. PHOTO: REUTERS Commerce Secretary Lutnick says US tariff levels on China won't change after deal WASHINGTON - US Commerce Secretary Howard Lutnick said on June 11 that the 55 per cent tariffs imposed by the United States on China will not change after a trade deal was struck between the two countries. A US-China trade deal is 'done,' US President Donald Trump said earlier in the day, hours after negotiators from Washington and Beijing agreed on a framework to get a fragile trade truce back on track. 'You can definitely say that,' Mr Lutnick told CNBC in an interview, when asked whether the tariff levels on China would not change. The trade deal, which needs to signed by both Mr Trump and Chinese President Xi Jinping, would remove Chinese export restrictions on rare earth minerals and other critical industrial components. Mr Lutnick also said China has agreed to examine how it can do more business with the US. He said that trade deals with other countries can be expected starting next week. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
