Private school parents jittery over service tax impact

The Star

a day ago

PETALING JAYA: Parents with kids in private and international schools are anxious about the financial implications, despite assurances that local students remain exempt from the expanded Sales and Service Tax (SST).
Many parents believe the increased operational costs may be passed on to them through higher fees or hidden charges when the expanded tax comes into effect on July 1.
Under the new policy, a 6% service tax will be imposed on private preschool, primary and secondary education providers that charge more than RM60,000 in annual tuition fees.
Sandra Lee, a mother of two who enrolled her children in an international school in Kuala Lumpur, said the new tax policy is worrying as it adds to the broader financial strain on families.
'The impact of additional taxes may accumulate, as there are also other areas that were not taxed before,' she said, adding that families will have less disposable income as a result.
'Education is essential, and any additional strain on affordability could force families to make tough decisions about their children's schooling,' she said.
Lee added that transparency and accountability mechanisms such as the e-invoicing system should be used to monitor how schools apply the tax, rather than placing the burden directly on consumers.
Aimi Shazwany Mat Noh, a mother of a student at a private institution in Kuala Lumpur, said the move raises practical concerns about how the policy will be implemented across the board.
'The government needs to understand that businesses don't usually price their services differently just because some customers are exempted.
'To stay sustainable, they'll likely apply a uniform approach,' she said.
She added that even with exemptions for Malaysian students, families may still feel the effects of the SST, though to a lesser degree.
'Many parents who opt for private education are not necessarily wealthy. There are working-­class families who save up to send their children to private schools.
'What policymakers should consider are incentives or income tax reliefs that can help such households minimise the financial impact and not make them a target for tax revenue,' she said.
Avinash Zhi Yong Suriar, 15, who studies at a private international school, said he is worried that the new tax may increase the school fees paid by his parents, calling it 'an unfair change'.
'Since many private schools increase fees as students progress to higher levels, I believe that if schools transfer the tax burden to parents, it should only be placed on students from Primary to Form Three (or equivalent) to avoid over-straining parents financially,' he said.