‘Expanded sales tax a burden'

The Star

21 hours ago

PETALING JAYA: A detailed study of products to be included in the expanded sales tax list show some everyday products used by the B40, not just 'high end' items such as salmon and avocado, says MCA president Datuk Seri Dr Wee Ka Siong (pic).
He said the 8% sales tax would extend to services such as wedding dress rentals, catering, traditional medicine, postnatal massages, elderly care and beauty treatments.
The list of taxable goods has been significantly expanded, while the list of tax-exempt items has been drastically reduced, he said.
'Previously, in 2022, the list of taxable goods was relatively slim at 62 pages, whereas the list of exempt items was 282 pages thick.
'Now, under the Madani government's initiative, the Sales Tax Gazette Order PU(A) 170 list of taxable goods has expanded to 222 pages, and the list of exempt items has been reduced to just 103 pages,' he said in a TikTok post on Wednesday.
The Finance Ministry said on June 9 that the expanded sales and service tax (SST) will begin on July 1.
There will be a 5% to 10% sales tax on selected non-essential goods. Additionally, the service tax will now cover new sectors, including rental or leasing, construction, finance, private healthcare, education and beauty services.
Dr Wee described this as a drastic change that would impact the cost of living, particularly for B40 families.
The expanded tax list would cover essential services that people rely on throughout their lives, from birth to old age, he said.
'What's more concerning is that exemptions on some basic food items have been quietly removed,' he said.
Basic items like mangoes, apples, oranges, dates, sauces, spices, canned fruits and instant food, which were previously tax-exempt, will now be subject to a 5% tax.
'This will lead to higher food prices in restaurants, markets and even at home,' he added.
He pointed out that Malaysia was already heavily dependent on imported food, spending over RM75.6bil a year, according to 2022 data from the Statistics Department.
'In this situation, it's shocking that the government wants to add to the burden of the people by taxing essential imported food,' he said.
Dr Wee said the number of taxable items had increased from fewer than 1,000 to over 4,000 sub-codes, while the list of exempt items had been cut by 70%.
'This clearly shows how wide-ranging the impact of this new tax will be on people's daily lives,' he said.
While the government had previously claimed only 'luxury items' like salmon and avocado would be affected, he said the official documents tell a different story.
'This isn't just about luxury goods. It will affect all Malaysians,' he said.
Dr Wee urged the government to re-examine the expansion list and remove more essential food and services to avoid burdening the rakyat.
'Even B40 families need to get married once in their lives. Are we saying they should only wear a sarong or a kain pelikat due to taxes on wedding services?' he said.
He called on the public to voice their concerns and demand fair treatment from the government.
In the tabling of Budget 2025, Prime Minister Datuk Seri Anwar Ibrahim said that 'premium' imported fruits, like avocados, would become more expensive due to an expanded SST.
However, based on the government's latest announcement, all imported fruits such as apples are now deemed non-essential and will incur a 5% sales tax.