The government says it has no plans to review the expanded Sales and Service Tax scope, citing targeted mitigation measures and low inflation as key reasons.
KUALA LUMPUR: The government has no plans to reassess the scope of the Sales and Service Tax, according to the Ministry of Finance.
In a written parliamentary reply, the ministry stated the SST implementation includes targeted and progressive mitigation measures designed to ensure fair distribution of the tax burden.
These measures aim to ensure the expanded SST scope, effective since July 1, 2025, is implemented prudently without burdening consumers and small and medium enterprises.
The ministry emphasised the expansion supports efforts to enhance national revenue gradually while ensuring long-term fiscal sustainability without affecting domestic economic growth.
The response came following a question from Kepong MP Lim Lip Eng, who inquired about potential reviews amid concerns over price increases affecting SMEs and consumers.
To maintain SME competitiveness, the government has provided specific facilities and exemptions including high registration thresholds for newly taxable services.
Registration thresholds are set at RM1 million annually for rental/leasing and fee-based financial services, and RM1.5 million for construction and private healthcare services.
Additionally, rental or leasing services provided to small traders with annual incomes below RM1 million are exempt from service tax.
The ministry highlighted Malaysia’s October 2025 inflation rate of 1.3% as evidence that revenue-enhancing measures can be implemented without significant cost of living pressure.
This represents a decrease from September’s 1.5% inflation rate, driven by moderated price pressures in food, housing, and utilities categories.
