Cut SST to 4% and postpone new tax to January, says Chinese chamber
The Associated Chinese Chambers of Commerce and Industry of Malaysia said rising costs, which have been felt in 2025, are expected to persist next year.
KUALA LUMPUR : A business chamber has urged the government to cut the sales and service tax to 4%, provide higher thresholds and expanded exemptions, and postpone implementation of the expanded tax to January to allow businesses more time to prepare.
The Associated Chinese Chambers of Commerce and Industry of Malaysia said in a statement that adequate preparation was crucial to ensure better compliance and smooth implementation, Bernama reported.
The chamber called for:
a lower tax rate of 4% in the first two years (2026–2027) to ease the burden on businesses and consumers;
a higher registration threshold, from RM2 million to RM3 million, for service tax on leasing, rental and construction services;
a higher tax exemption threshold, of RM2 million in annual sales instead of RM1 million announced on Thursday, for small and medium-sized enterprises.
'We also propose a longer exemption period of 36 months for non-reviewable and reviewable contracts, to cover all project types due to the nature of the projects and their cycles,' the chamber said.
The expanded SST applies to additional services (wellness centres, financial, and healthcare) and three new services (rental or leasing, construction works, and education), and is due to begin on July 1.
The chamber said in a statement that it 'cautiously welcomed' the government's review of the expanded SST announced on Thursday.
However, the chamber said there were concerns over multiple cost increases coinciding with a challenging global and domestic economic environment, exacerbated by the uncertainty surrounding US trade tariff policies and ongoing conflicts in the Middle East.
'The effects of rising costs, which have been felt in 2025, are expected to persist or influence the business and economic landscape in 2026,' it added.
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