KUALA LUMPUR: The finalised sales and service tax (SST) scope of expansion and the review of the SST rates will be gazetted through subsidiary legislation in the first quarter (1Q) of 2025 after the engagement process is completed to allow sufficient preparation before enforcement of the changes.
The Ministry of Finance (MOF) said that through the ministry and the Royal Malaysian Customs Department, the government is actively conducting engagement sessions with ministries and industry stakeholders to finalise the scope and tax rate.
“In addition to engaging with industries directly related to sales tax, large industries in the services (sector) are also included (in the discussions),” it said in a written response on the Parliament website yesterday (Thursday).
The MOF was responding to Datuk Seri Dr Wee Ka Siong (BN-Ayer Hitam) regarding the details of the progressive expansion of the SST’s scope that will be implemented effective May 1, 2025, and whether there will be an increase in tax rates in the expanded scope.
The ministry said that evaluating and considering the responses received from the engagement session, the government will propose maintaining the zero per cent sales tax rate on essential goods, while the rates of 5.0 and 10 per cent will be extended to non-essential goods, processed goods, high-value goods, and imported goods.
“The determination of the service tax involves the proposed rates of 6.0 and 8.0 per cent to be extended to certain service sectors,” it said.
The MOF added that engagements also discussed the complexity of emerging issues and their potential impact on the involved service sectors.
It said the government will ensure that the tax rates will not affect vulnerable groups and that the impact of inflation will be controlled.
