Six private healthcare groups warn 8pc rental SST may cripple clinics, pharmacies
KUALA LUMPUR: Six private healthcare associations have warned that the 8 per cent service tax (SST) on commercial rental could force many clinics and pharmacies — particularly in urban areas — to shut down due to unsustainable operating costs.
In a joint statement, the coalition urged the government to exempt healthcare providers from the tax, saying it disproportionately affects small and independent practices already struggling with controlled consultation fees and rising overheads.
"Rental is among the largest fixed costs for clinics, pharmacies and health facilities. The imposition of the 8 per cent SST on commercial rent continues to place a significant and disproportionate financial burden on private healthcare providers," the statement read.
The signatories to the statement were the Malaysian Medical Association, Pertubuhan Doktor-Doktor Islam Malaysia, Medical Practitioners Coalition Association of Malaysia, Malaysian Association for Advancement of Functional & Interdisciplinary Medicine, Private Physiotherapy Clinics Owners Association of Malaysia, and the Malaysian Community Pharmacy Guild.
The groups also raised the alarm over the looming increase in electricity tariffs, set to take effect tomorrow, saying it would further erode the financial viability of practices already grappling with controlled fees and rising overheads.
"Consultation fees for general practitioners have been regulated and unchanged for the past 30 years under the Private Healthcare Facilities and Services Act. Providers have little room to absorb or pass on rising costs," they said.
The coalition criticised the assumption that exceeding the RM1 million annual revenue threshold automatically indicates high profitability.
"Providers often surpass this figure because of the essential and continuous nature of services, not because of large profit margins."
They warned that without intervention, the combination of rental SST and increased utility costs could trigger a wave of downsizing, job losses, or outright closures, especially among small healthcare practices.
"These closures would not only limit access to care in the private sector but also put pressure on the already overstretched public health system."
The statement added that such cost pressures were contrary to the goals of the National Medicines Policy, which aims to ensure all Malaysians have access to affordable, quality care.
The coalition also took issue with the 6 per cent SST on private healthcare services provided to foreign patients, particularly low-income migrant workers in 3D (dirty, dangerous, and difficult) jobs.
"These patients rely on GP clinics for affordable, essential care. Taxing these services raises serious humanitarian and public health concerns."
They said while they welcomed efforts to revise the SST framework, the reforms did not go far enough to protect both healthcare providers and the communities they served.
"We urge the government to exempt healthcare providers from the 8 per cent SST on rental and reconsider the application of SST on services in the primary care sector," it added.
On June 27, the government announced a revision to the SST framework, following extensive feedback from the public and engagement with industry stakeholders on the proposed expansion.
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Six private healthcare groups warn 8pc rental SST may cripple clinics, pharmacies
KUALA LUMPUR: Six private healthcare associations have warned that the 8 per cent service tax (SST) on commercial rental could force many clinics and pharmacies — particularly in urban areas — to shut down due to unsustainable operating costs. In a joint statement, the coalition urged the government to exempt healthcare providers from the tax, saying it disproportionately affects small and independent practices already struggling with controlled consultation fees and rising overheads. "Rental is among the largest fixed costs for clinics, pharmacies and health facilities. The imposition of the 8 per cent SST on commercial rent continues to place a significant and disproportionate financial burden on private healthcare providers," the statement read. The signatories to the statement were the Malaysian Medical Association, Pertubuhan Doktor-Doktor Islam Malaysia, Medical Practitioners Coalition Association of Malaysia, Malaysian Association for Advancement of Functional & Interdisciplinary Medicine, Private Physiotherapy Clinics Owners Association of Malaysia, and the Malaysian Community Pharmacy Guild. The groups also raised the alarm over the looming increase in electricity tariffs, set to take effect tomorrow, saying it would further erode the financial viability of practices already grappling with controlled fees and rising overheads. "Consultation fees for general practitioners have been regulated and unchanged for the past 30 years under the Private Healthcare Facilities and Services Act. Providers have little room to absorb or pass on rising costs," they said. The coalition criticised the assumption that exceeding the RM1 million annual revenue threshold automatically indicates high profitability. "Providers often surpass this figure because of the essential and continuous nature of services, not because of large profit margins." They warned that without intervention, the combination of rental SST and increased utility costs could trigger a wave of downsizing, job losses, or outright closures, especially among small healthcare practices. "These closures would not only limit access to care in the private sector but also put pressure on the already overstretched public health system." The statement added that such cost pressures were contrary to the goals of the National Medicines Policy, which aims to ensure all Malaysians have access to affordable, quality care. The coalition also took issue with the 6 per cent SST on private healthcare services provided to foreign patients, particularly low-income migrant workers in 3D (dirty, dangerous, and difficult) jobs. "These patients rely on GP clinics for affordable, essential care. Taxing these services raises serious humanitarian and public health concerns." They said while they welcomed efforts to revise the SST framework, the reforms did not go far enough to protect both healthcare providers and the communities they served. "We urge the government to exempt healthcare providers from the 8 per cent SST on rental and reconsider the application of SST on services in the primary care sector," it added. On June 27, the government announced a revision to the SST framework, following extensive feedback from the public and engagement with industry stakeholders on the proposed expansion.
