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Daily Express
3 days ago
- Business
- Daily Express
Revised SST will have no impact on low-to-middle income earners, says economist
Published on: Thursday, June 12, 2025 Published on: Thu, Jun 12, 2025 By: Nora Mahpar, FMT Text Size: The zero sales tax rate for basic necessities will be maintained while a 5% to 10% rate will be imposed on non-essential goods from July 1. PETALING JAYA: The revision of the targeted sales and service tax (SST) and the expansion of its scope to cover more items will not have any impact on the low-to-middle income group, according to an economist. On the other hand, Idham Razak of Universiti Teknologi Mara said, widening the definition of luxury goods to include semi-basic necessities such as electrical products will weigh down on the middle-income earner. Advertisement Idham told FMT that exempting basic necessities and services from the SST could even help to cushion any sharp increase in the cost of living, if it is implemented progressively. He noted that the low-to-middle income earners generally set aside a huge portion of their income for basic necessities like food, education and medical expenses. The government's decision to focus on imposing taxes on luxury goods and non-essential items meant that only the high-income earners would be affected, he added. Idham said the RM5 billion in government revenue expected to be generated from the expansion of the SST would bring long-term benefits. 'These funds can be channelled back to the people via the Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (Sara) cash aid initiatives,' he said. In November, finance minister II Amir Hamzah Azizan said that with the expansion of the SST, government revenue from the tax would rise to RM51.7 billion in 2025, from RM46.7 billion in the previous year. Idham said the additional revenue would enable the government to finance infrastructure development without having to dip into the funds for other important sectors. 'It (the additional revenue) creates fiscal space for targeted subsidies or incentives to encourage economic mobility,' he explained. The additional revenue would also help to reduce the budget deficit, debts and liabilities, he said. 'In short, a targeted taxation system has the potential to protect the low-income earners and complement sustainable and inclusive fiscal policies,' Idham added. On Monday, the finance ministry said that the zero tax rate for basic necessities will be maintained while a 5% to 10% rate will be imposed on non-essential goods from July 1. The service tax, on the other hand, will be expanded to include rent, lease, construction, financial services, private healthcare and education. Aimi Zulhazmi Abdul Rashid of Universiti Kuala Lumpur said the revision for certain products and services could see inflation rise, although it would still be manageable. He said the objective of revising the SST and expanding its scope was the same as that for the goods and services tax (GST) that was introduced in 2015 and was in force until it was replaced by the SST in 2018. 'The aim is to increase government revenue,' he added. * Follow us on our official WhatsApp channel and Telegram for breaking news alerts and key updates! * Do you have access to the Daily Express e-paper and online exclusive news? Check out subscription plans available. Stay up-to-date by following Daily Express's Telegram channel. Daily Express Malaysia
Daily Express
4 days ago
- Business
- Daily Express
Private hospitals call for delay to 6% SST for non-Malaysians
Published on: Wednesday, June 11, 2025 Published on: Wed, Jun 11, 2025 By: FMT Reporters Text Size: Several associations raised concerns about the potential impact on service accessibility, pricing transparency, and operational preparedness, especially for sectors like healthcare. (Envato Elements pics) PETALING JAYA: Private hospitals are urging the finance ministry to postpone the implementation of the 6% sales and service tax (SST) on private healthcare services for non-Malaysians, set to take effect on July 1. In a statement, the Association of Private Hospitals Malaysia (APHM) raised concerns over the implementation timeframe, saying 'private hospitals will need sufficient lead time to adjust administrative systems, billing processes, and compliance procedures'. Advertisement APHM also said it had sent a written request to the finance ministry today for a 'more practical timeline'. 'This is to allow for a smoother transition, minimise disruption to patient services, and help ensure full compliance with the new requirements.' APHM also said it had sought further clarification on the policy's application, including its impact on professional fees, treatment of foreigners residing in Malaysia, and other related implementation matters. The finance ministry announced two days ago that the service tax would be expanded to include rent, lease, construction, financial services, private healthcare, and education, with hopes that it would help generate RM51.7 billion in SST revenue next year. Under this policy, private hospitals will charge a 6% SST on healthcare services provided to foreign nationals. Since the announcement, several associations have raised concerns about the potential impact on service accessibility, pricing transparency, and operational preparedness, especially for sectors like healthcare and education which serve many non-Malaysians including foreign workers, expatriates, and international students. * Follow us on our official WhatsApp channel and Telegram for breaking news alerts and key updates! * Do you have access to the Daily Express e-paper and online exclusive news? Check out subscription plans available. Stay up-to-date by following Daily Express's Telegram channel. Daily Express Malaysia
Free Malaysia Today
28-04-2025
- Business
- Free Malaysia Today
SST expansion postponed, says report
A finance ministry spokesman said the expanded SST would be introduced at a later date. (Facebook pic) PETALING JAYA : The Treasury's planned expansion of the sales and service tax, or SST, has been postponed, according to a news report. The Star quoted a finance ministry spokesman as saying the expanded SST would be introduced at a later date, adding that its scope is being refined. The spokesman also said the Treasury had already carried out engagements nationwide with various industry players as part of finalising the new SST scope and tax rates. 'The guidelines and scope are now being refined to ensure a smooth implementation,' they said. The expansion of the scope for the SST was supposed to be implemented from May 1. However, there have been calls from the Federation of Malaysian Manufacturers (FMM), among others, for the expanded SST to be put on hold in view of the US's tariffs on Malaysian imports. While Donald Trump's administration has postponed the tariffs imposed on nations, including Malaysia's 24% rate, Washington has maintained the 10% blanket duty on almost all US imports. In November, finance minister II Amir Hamzah Azizan said the expansion of the SST was expected to generate RM51.7 billion in revenue in 2025. This would represent an additional revenue of RM5 billion over the current SST collection forecast of RM46.7 billion.
