Latest news with #SalesandServiceTax
The Star
5 hours ago
- Business
- The Star
Malaysia's fiscal stability will be jeopardised if SST expansion deferred, says PM
KUALA LUMPUR: The nation's fiscal stability would be jeopardised if the proposed expansion of the Sales and Service Tax (SST) were deferred, said Datuk Seri Anwar Ibrahim. The Prime Minister stated that such a move would result in the government missing its revenue target and impact its ability to fulfil its responsibilities towards the rakyat. "The revision of the sales tax rate and the expansion of the SST scope, which took effect on July 1, is expected to generate additional revenue of RM5bil over the six months of this year 2025 and RM10bil in 2026," he said in a written parliamentary reply to a question raised by Lim Guan Eng (PN-Bagan) in Dewan Rakyat on Thursday (July 24). Lim had asked whether the SST expansion could be deferred in light of the United States tariffs and the current economic slowdown. Anwar, who is also the Finance Minister, reaffirmed the government's commitment to strengthening the nation's fiscal position through tax reforms. He emphasised that this was crucial in ensuring sustainable revenue to support development and social programs, despite growing public concern over the rising cost of living. He noted several measures implemented to cushion the impact of the SST on the rakyat and businesses. Among them, he cited the RM13bil allocation for STR/SARA cash aid programs, up from RM10bil compared to 2024. He also mentioned the increased allocation for the Education Ministry, from RM59bil last year to RM64bil in 2025. He added that the allocation for the Health Ministry was increased from RM41bil to RM45bil, which would aid in hiring contract doctors. Service tax exemptions will be granted to tenants classified as small and medium enterprises (MSMEs) with annual sales of less than RM1mil. For construction service providers, the threshold for service tax compliance has been increased from RM500,000 to RM1.5mil over 12 months, to ease the compliance burden on smaller contractors. This same threshold applies to small-scale private healthcare clinics to protect them from undue tax pressure. Regarding the breakdown of the additional tax revenue, particularly those borne by locals and foreigners as requested by Lim, Anwar said this was not possible. He explained that it was not feasible to accurately determine such a breakdown because the national revenue collection system does not categorise contributions based on the taxpayer's citizenship.
New Straits Times
7 hours ago
- Business
- New Straits Times
Postponing SST expansion would jeopardise fiscal stability, says Anwar
KUALA LUMPUR: Any proposal to defer the expansion of the Sales and Service Tax (SST) would result in the government falling short of its revenue targets, said Prime Minister Datuk Seri Anwar Ibrahim. Anwar, who is also Finance Minister, said such a move would negatively impact the government's fiscal position and its ability to meet its responsibilities to the people. "The revision of the sales tax rate and the expansion of the SST scope, which took effect on July 1, is expected to generate additional revenue of RM5 billion over the six months of 2025 and RM10 billion for the full year of 2026," he said in a written parliamentary reply. He was responding to Lim Guan Eng (PH–Bagan), who had asked whether the SST expansion could be postponed until issues related to tariffs and the current economic slowdown are addressed. Lim also requested a breakdown of the additional tax revenue expected, specifically the share borne by citizens versus non-citizens. In reply, Anwar said it was not possible to accurately determine such a breakdown, as the national revenue collection system does not categorise contributions based on the taxpayer's citizenship. He said that the government was acutely aware of public concern over the rising cost of living. "Nonetheless, the government must also ensure that Malaysia's fiscal space remains sustainable, in order to finance its social and development obligations so that the benefits can continue to be channelled to the rakyat. "It is widely acknowledged that taxation is the most crucial source of revenue for any country. However, Malaysia currently has one of the lowest tax-to-GDP ratios in the region, at around 12 per cent, compared to the 15 per cent recommended by the World Bank to ensure the long-term sustainability of economic development," he said. The revised SST rates under Budget 2025 took effect on July 1. According to the Finance Ministry, the measure aims to bolster the country's fiscal position by increasing revenue and broadening the tax base. Under the updated structure, selected non-essential and luxury goods are taxed at rates between five and 10 per cent. Staple items such as sardines, tuna and mackerel (kembung) remain exempt, while premium imported seafood such as salmon, cod and king crab are subject to a five per cent SST. Local fruits are also exempt from the sales tax, whereas imported fruits incur a five per cent rate.
New Straits Times
8 hours ago
- Business
- New Straits Times
Analysts flag Nestle, F&N, Farm Fresh, Mr DIY as stimulus winners
KUALA LUMPUR: The recently announced government stimulus is expected to provide a modest boost to Malaysia's consumer sector by supporting short-term spending, particularly on essential items and value-focused retail. CIMB Securities said food and beverage (F&B) producers like Nestle (M) Bhd, Fraser & Neave Holdings Bhd, QL Resources Bhd, and Farm Fresh Bhd are likely to benefit from increased demand for staple F&B products, many of which may be eligible for purchase using the RM100 credit. "Other retailers such as Mr DIY Group (M) Bhd, Padini Holdings Bhd, Aeon Co (M) Bhd, Yoong Onn Corporation Bhd, Bonia Corporation Bhd, Berjaya Food Bhd, and 7-Eleven Malaysia Holdings Bhd, could see improved footfall and higher spending per customer as disposable incomes increase, amplified by the recent 25 basis point overnight policy rate cut to 2.75 per cent," it said. CIMB Securities said that within the consumer sector, it remains in favour of companies that benefit from the steady demand for everyday essentials and are well-positioned to tap into consumer downtrading by targeting the mass-market segment. It expressed a positive view on the consumer sector following Prime Minister Datuk Seri Anwar Ibrahim's recent announcement of new fiscal support measures. However, the research house is maintaining its current earnings forecasts, noting that the fiscal measures are already in line with its existing revenue growth assumptions for the companies under its coverage. It reiterated a "Neutral" stance on the sector, which is trading at 27.2 times one-year forward price to earnings ratio, slightly more than one standard deviation below its five-year average of 29.1 times. CIMB Securities said current valuations appear reasonable, given the backdrop of subdued consumer sentiment, higher sales tax on discretionary goods, ongoing boycott-driven impact on certain companies such as Nestle (M) and Berjaya Food, as well as cost pressures from the widened Sales and Service Tax on rental expenses.
Barnama
a day ago
- Business
- Barnama
Latest Fiscal Support Measures Positive For Consumer Sector -- CIMB Securities
BUSINESS KUALA LUMPUR, July 23 (Bernama) -- The latest fiscal support measures announced by Prime Minister Datuk Seri Anwar Ibrahim are expected to bolster Malaysia's consumer sector by reinforcing near-term spending, particularly on essential goods and value-based retail, said CIMB Securities Sdn Bhd. CIMB Securities, however, is keeping its earnings forecasts unchanged at this juncture, noting that the measures would underpin existing revenue growth assumptions for the stocks under its coverage. 'Within the consumer sector, we continue to advocate focusing on companies benefiting from inelastic demand for daily necessities and those well-positioned to capture consumer downtrading trends by targeting the mass-market segment,' it said. CIMB Securities highlighted that food and beverage (F&B) manufacturers, such as Nestle, F&N, QL Resources, and Farm Fresh, are likely to benefit from stronger demand for basic food and beverage products, many of which are likely to be eligible for purchase using the RM100 credit. It opined that other retailers such as Mr DIY ('Buy' call), Padini (Buy), Aeon (Buy), Yoong Onn (Buy), Bonia (Hold), Berjaya Food and SEM (Reduce) could see improved footfall and higher spending per customer as disposable incomes increase, amplified by the recent 25 basis points overnight policy rate cut to 2.75 per cent. 'As such, we maintain our 'Neutral' call on the sector. We believe valuations are fair at this juncture, reflecting the ongoing soft consumer sentiment and higher sales tax on discretionary goods, the impact of boycott activities on selected consumer names and cost pressures from the expanded Sales and Service Tax (SST) on rental costs,' it said. Earlier today, Anwar unveiled a new round of fiscal support measures aimed at alleviating living costs, stimulating domestic consumption, and boosting household spending ahead of the upcoming Merdeka Day and Malaysia Day celebrations. Key measures include a one-off RM100 e-credit via MyKad (SARA scheme), doubling the Rahmah Madani Sales programme budget to RM600 million for 2025, a public holiday on Sept 15, 2025, to encourage domestic travel, a toll rate freeze for 2025 and maintaining RON95 subsidies, with the subsidised price to be reduced from RM2.50 per litre to RM1.99 per litre for all Malaysians. -- BERNAMA
New Straits Times
a day ago
- Business
- New Straits Times
No excuse for unjustified price hikes under SST, Johor traders warned
JOHOR BARU: Johor Domestic Trade and Cost of Living Ministry launched an enforcement operation to curb profiteering following the implementation of the expanded Sales and Service Tax (SST). The operation codenamed Op Kesan 4.0, is a statewide enforcement blitz, which took effect early this month. State ministry director Lilis Saslinda Pornomo said enforcement officers had conducted checks on 48 business premises involving 235 items, which was carried out under the Price Control and Anti-Profiteering Act 2011. During a walkabout at a supermarket in Larkin Junction here today, Lilis said the 48 premises were issued price information verification notices to obtain detailed data on cost, pricing, and profit margins. "The ministry also received four complaints related to suspected profiteering under the operation, and investigations are ongoing. "The operations main focus is to ensure that businesses do not exploit SST adjustments as a blanket excuse to increase prices without justification," she said in a statement today. The enforcement operation will also monitor four key elements, which includes items and services affected by SST changes, businesses above the SST registration threshold, price movement timelines aligned with SST enforcement dates, and profit margins to detect unreasonable mark-ups. Lilis warned that offenders found guilty of profiteering can be fined up to RM100,000 or jailed up to three years, or both. Companies face fines of up to RM500,000. She urged businesses to assess the four elements before adjusting prices or charges and reminded the public to report suspicious hikes through official channels, including the Ez ADU app, WhatsApp, and the KPDN e-complaint portal.
