
Expanded SST to cover more services from July 1, essentials remain tax-free
PUTRAJAYA: The expanded Sales and Service Tax (SST), which will come into effect on July 1, will cover six new categories of services namely leasing, construction, finance, private healthcare, education and beauty.
Finance Minister II Datuk Seri Amir Hamzah Azizan said the changes also include higher sales tax rates on selected luxury goods such as king crab, truffle mushrooms, essential oils, imported fruits and racing bicycles.
However, essential goods including rice, sugar, milk, cooking oil, medicines and basic construction materials will remain exempt under the zero per cent sales tax bracket.
Amir Hamzah Azizan said the revamped SST structure is aimed at strengthening government revenue without imposing additional burdens on the majority of citizens.
"The government is committed to pursuing reforms under the Madani economic framework," he said in a statement today, following a closed-door editors' briefing held here earlier.
"To ensure the majority of people are not affected by the SST review, the government has adopted a targeted approach by exempting essential goods and services from taxation," he added.
Amir Hamzah added that the extra revenue collected would be channeled towards improving public services and expanding the social safety net.
"This improvement to SST will enable further upgrades in public services, especially increasing the amount of direct financial aid to the people, while also strengthening public infrastructure.
"The additional revenue can benefit the entire country without adding pressure on the majority of citizens."
Under the expanded scope, service tax will now apply to leasing services at a rate of eight per cent for companies with annual leasing revenue above RM500,000.
However, leases involving residential buildings, reading materials, overseas assets, and certain financial leases will be exempt.
Smaller businesses, particularly micro, small and medium enterprises, will also be excluded if their annual leasing revenue falls below the threshold.
For construction services, a six per cent service tax will apply to providers with annual revenue exceeding RM1.5 million.
Residential construction and public housing-related works are exempt and exemptions also apply to business-to-business (B2B) transactions to avoid double taxation.
Financial services that involve fees or commissions will be taxed at eight per cent. Basic financial services such as standard banking transactions, Islamic financing mechanisms, foreign exchange gains, outbound money transfers, and services tied to capital markets, will remain exempt.
Amir Hamzah said the government has also provided relief for transactions involving Bursa Malaysia, Labuan-based services and B2B dealings.
Private healthcare services for non-citizens will be taxed at six per cent. Malaysians will remain exempt, including for traditional treatments like Malay, Chinese, Indian, Islamic medicine, homeopathy, chiropractic and osteopathy.
The government has also confirmed that allied health services such as physiotherapy, audiology and speech therapy will remain exempt for Malaysians.
In the education sector, a six per cent tax will be imposed on private preschools, primary and secondary schools that charge more than RM60,000 in annual fees per student.
However, students who are Malaysian citizens, as well as persons with disabilities, will not be taxed. In the case of higher education, the tax applies only to international students, while Malaysian students are fully exempt.
Beauty services, including facial treatments and hairdressing, will be taxed at eight per cent if the value of taxable services provided by a business exceeds RM500,000 within 12 months.
To support a smooth transition, the government will not take legal or punitive action against companies that comply with the new rules until Dec 31, 2025.
The Finance Ministry and the Customs Department will issue detailed regulations, guidelines, and frequently asked questions (FAQs) in the coming weeks to assist businesses in navigating the updated tax regime.
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


The Star
an hour ago
- The Star
Asean News Headlines at 10pm on Wednesday (June 11, 2025)
Malaysia * Vertical schools in housing projects to help reduce transport costs, says PM Anwar * Gerik bus crash: School to prepare report on teacher's offensive remarks on students' deaths, says state govt * Gerik bus crash: Tourism ministry calls for return of regulatory power over sector's transportation * Your vaccine from 2021 is not enough: Expert says Covid-19's threat remains * Companies subject to new SST if they reach RM500,000 revenue threshold within 12 months, says Finance Ministry * Influencer raises alarm over FB group circulating photos of underage students * Sabah woman sues KJ, govt over what she claims is wrongful Covid-19 enforcement * Three people lose over RM80,000 to lucky draw scam * Student who used hot iron on sleeping dorm mates sent to Henry Gurney School * Gerik bus crash: PTPTN loans of 13 UPSI students killed in accident fully settled, says Zambry * Court sets Aug 19 for decision in activist's appeal over challenge to online speech law * Local trio, foreign woman detained for holding three men against their will * Sukuk misuse case: Tan Sri quizzed by MACC for six hours * No electricity surcharge for Sabah, Labuan users until year-end * National Day 2025 to be launched in Johor, Malaysia Day 2025 in Penang * Court postpones decision on Lahad Datu vocational college murder case to July 23 * Four charged in Sabah for alleged role in multi-million ringgit investment scam * Gerik bus crash: Company's permit revoked with immediate effect, says Loke * George Town's heritage status safe, says Penang exco member * Man, 62, nabbed over alleged sexual assault on underage girl in Lahad Datu * 'Still Live' series in KL creates a shared space for sound and sketch * Permanent border wall seen as solution to smuggling in Kelantan, says police chief * Woman swept away by strong currents after car plunges into river found drowned * Sugar, rice and selected imported foods exempt from expanded SST, says Finance Ministry * Malaysia commits to more reforms, solidarity in labour rights agenda, says Steven Sim * Imported fruits hit with 5% tax under new SST rules * Sukuk misuse case: MACC records Tan Sri's statement * Cops find RM4.67mil worth of meth and ketamine in abandoned car in Gerik * Gerik crash: Cops advise bus driver not to make public comments * Preserving historic sites essential for cultural and economic growth, says activist * What are the items you will have to pay extra taxes for from July 1? * Industry concerns over expanded SST Singapore * Man arrested for allegedly shoplifting twice in Singapore's Changi Airport transit area * Passengers reschedule travel plans and seek refunds following Jetstar Asia's abrupt closure * Removal of mandatory minimum sentences for some dangerous driving offences in Singapore to kick in from Thursday (June 12) * Singaporean woman given six months' jail in Taiwan for stalking singer, threatening her online * World acclaimed singer Maher Zain makes long-awaited return to the region with a South-East Asia Tour 2025 * Drug trafficker in Singapore avoids death penalty by 0.01g, sentenced to 31 years' jail * Sacked Mediacorp employee arrested for voyeurism * Second round of Pofma sanctions for owner of The Online Citizen's website, social media accounts * National Trades Union Congress exploring options to match retrenched Jetstar Asia staff to roles at SIA Group: Labour chief * Qantas says Singapore airport fee hikes fuelled Jetstar Asia cut * Jetstar Asia closure: Here's what customers need to know * Jetstar Asia to cease operations from July 31, over 500 employees in Singapore affected Indonesia * Dozens arrested for Indonesian love scam ring targeting American men * Indonesia nears trade deals with EU, Eurasian bloc * Drone drops drugs into Indonesian prison * Businesses grapple with Bali's single-use plastics ban * Alleged laptop procurement graft puts ex-minister Nadiem in spotlight * Suspected fatal bullying cases in Indonesia highlight growing violence issue in schools * Govt revokes mining permits in Raja Ampat after outcry Thailand * Thai Foreign Minister champions bilateral talks with Cambodia * Female Thai police colonel accused of trafficking sedative drugs since 2022 * Thai defence minister unfazed by Cambodia's ICJ plan, says Thailand ready with response measures * Vietnamese 'romance scammers' busted in Thai luxury villa raid * Thai police to suspend female doctor over illegal sedative trafficking * Thailand's former Prime Minister Suchinda Kraprayoon, who cracked down on 1992 protests, dies at 91 Philippines * 'No one can stop' Sara Duterte impeachment trial: Philippine House prosecutors * The rise and fall of Joseph Estrada: From people's champion to disgraced Philippine president * Philippines exits EU 'high-risk' dirty money list * Filipino actor Miko Gallardo opens up about past rape, alleged blackmail * Senators return impeachment case against Sara Duterte to the Philippine House Vietnam * Patients with public health insurance suffer long waits at hospitals * Vietnam talks to Gap, Levi Strauss in battle to head off Trump tariffs * Qualcomm launches AI R&D centre in Vietnam * Vietnamese animation levels up with dual dialect debut Myanmar * UN envoy to Myanmar warns that violence puts country on 'path to self-destruction' * Toxic Thailand rivers pinned on Myanmar mines * Myanmar rebels claim to have shot down a fighter jet being used by military to attack ground targets Cambodia * Climate 'greenwashing' will harm Cambodian workers, suggests new report * Cambodia's economy shows resilience amid global uncertainty: World Bank * Tourism ministry shares details of Cambodia-China Tourism Year events * Cambodia moves forward with ICJ case over border dispute with Thailand * Anti-tank mine blast kills tractor driver in western Cambodia: official * Cambodia-Thailand border talks drag on Laos * Laos records US$56mil trade surplus in April * Chinese firm to undertake Lao agriculture and forestry development project * China Aircraft Corporation requests majority stake in Lao Airlines as govt seeks partnership Brunei * Brunei hosts first national conference for persons with different abilities * From battlefield to brotherhood in Brunei Aseanplus * Trump says China will supply rare earths in 'done' trade deal * Deal 'is done', says Trump, as China and US trade truce gets back on track after London talks * 5.9-magnitude quake rattles Taiwan * HK actor Louis Koo visits Penang for the first time, promises to return in the future: 'I've fallen in love' * Asean nations brace for Trump tariffs with bold stimulus packages * People's Liberation Army officer rescues five people from drowning in Henan, China * Actor Shaun Chen saves more after moving family from Singapore to Johor: 'Upgraded my lifestyle' * Meghalaya honeymoon murder: New bride devised two plans to kill husband, bad weather forced her to shelve 'plan A', switch to 'plan B' * Chinese soldier, famed for striking resemblance to top actress Dilraba, is elite sniper * Hong Kong advocates on why church sex abuse cases take time to surface * Malaysia to pioneer Asean TVET accreditation, says Zahid * Ringgit rebounds as US dollar weakens despite optimism over trade talk * US arrests another Chinese scientist with no permit to send biological material * Rising young talents MUAH! returns with second single titled 'Kajang', a taste of young life in Malaysia and South-East Asia * South Korean military suspends loudspeaker broadcasts against North Korea in border area * Tengku Zafrul to visit Washington on June 18 for tariff talks * Samyang Foods completes plant expansion amid growing demand for Buldak spicy ramyeon * Asean TVET Council must chart a clear path forward, says Zahid * Fuel prices June 12-18: Unchanged across the board * Australian murder suspect denies drying deadly mushrooms * Fans greet K-pop stars Jimin and Jung Kook of BTS upon discharge from military service * Sri Lanka hikes household power tariffs by 15 per cent, power regulator says * Season 3 of 'Squid Game' more intense than ever, director hints at possible spin-offs * Bangladesh issues travel warnings as Covid-19 infections rise in neighbouring countries * China stocks near 3-week high as Sino-US trade truce sparks optimism * AirAsia close to buying at least 100 Airbus jets in shift to A220, sources say * Man carries daughter through 12 years of school to gaokao * Kazakhstan says China's Xi to visit for Central Asian summit * Price wars eroding auto industry profits * MyCert: Malaysia data breaches up 29% in Q1 2025 * Malaysia records approved investments of US$21bil in 1Q * Rare earths: China's trump card in trade war with US * FBM KLCI rises at midday on U.S.-China trade optimism * Harimau Malaya roar with 4-0 win against Vietnam after TMJ pep talk * Comment: Why do the young woo Labubu? * May was world's second-hottest on record, EU scientists say * Pakistan raises defence budget 17% in boost for Chinese weapons suppliers * Asian equities rally after China-US framework on trade * South Korea's new President Lee Jae-myung asks citizens to recommend Cabinet members * Part toy, part fashion: How did Labubu get so popular? * US, China reach deal to ease export curbs, keep tariff truce alive * Najib's RM27mil money laundering trial to proceed, AGC rejects review request * Sony's bet on sports pays off with AI line judges at Wimbledon * Tesla's public robotaxi rides set for tentative June 22 start, CEO Musk says * Malaysia and the UN High Seas Treaty: What's next? * Pentagon chief vows to honor US-Australia sub deal * FBM KLCI rebounds in early trade on U.S.-China trade optimism * Ringgit opens higher against greenback as US-China trade talks resume * Hong Kong actress Crystal Fung denies rift with fellow celeb Louisa Mak * China's Li says US-China reach framework on trade, will report back to leaders * Out of the army and back to ARMY * HK to tighten national security scrutiny of restaurants * Frigate arrives in Australia as Tokyo bids for defence deal * Fire near Jogye temple halted, treasures spared * China extends hand to Korea * Smuggler stopped with spiders, birds and possums * Billionaire to plead guilty * Chong Wei advises injured Ng to seek treatment overseas * Penang's call for mindful tourism * Rexy wants to see Man-Tee become hardy boys * Grab eyes US$1.25bil bond sale for acquisitions * China bans bank from luring depositors with gifts * Banks expect one cut in OPR in 2H25 * Capital A is in the final stages of its PN17 exit plan, says Fernandes


Malaysiakini
3 hours ago
- Malaysiakini
Local fruits not subject to sales tax, nor impacted by gazette order
(Editor's note: This article has been updated after receiving clarification from the Finance Ministry.) The Finance Ministry has cleared up confusion over perceived discrepancies regarding the implementation of the sales and services tax (SST) on fruits, be they locally grown or imported. The gazetted sales tax order published on Monday showed that many fruits grown locally were listed to be taxed five percent, while the tax-exempt list only listed coconut...


Free Malaysia Today
4 hours ago
- Free Malaysia Today
Reforms ongoing and backed by solid evidence, says Azalina
Law and institutional reform minister Azalina Othman Said said more than 30 legislative amendments have been passed since 2023. (File pic) PETALING JAYA : The government's reform agenda is ongoing and backed by solid evidence, says law and institutional reform minister Azalina Othman Said. In a Facebook post, Azalina said she agreed with Prime Minister Anwar Ibrahim's remarks yesterday that reforms cannot be rushed, and stressed that systemic changes should not be executed hastily or rolled out merely to look good on paper. She said the current administration has moved at an unprecedented pace in laying the groundwork for institutional and legislative reforms, setting a benchmark not seen under previous governments. Azalina said the legal affairs division of the Prime Minister's Department, together with other agencies under her purview, had made significant progress in implementing reforms in a structured and comprehensive manner. This included the successful reinstatement of the Parliamentary Services Act 2025, and the implementation of more than 30 legislative amendments since 2023. 'This shows that the government's reform efforts are not mere rhetoric. 'This is clear evidence that the Madani government's reform agenda is in motion and being implemented. 'As policymakers, our duty is to ensure that every reform initiative is not only ambitious but, more importantly, feasible and beneficial to the Malaysian public,' she said. Azalina said the legal affairs division had launched the PetaRI portal, a dedicated online platform to provide the public with regular updates on the progress of government reform initiatives. 'Whether we like it or not, we must acknowledge that the Madani government has laid the foundation for reform at a pace unmatched by previous administrations. 'The proof lies in the institutional changes and legal updates that the public can assess for themselves,' she said.