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KUALA LUMPUR: The Master Builders Association Malaysia (MBAM) has “strongly urged” the government to consider providing tax exemption for intragroup services in logistics and maintenance and repair services, “not only for the same taxable services under logistics services.”

Its president Oliver HC Wee said the association is also hoping that the government could consider a business-to-business (B2B) tax exemption for maintenance and repair services as it is not available currently.

“This is to avoid multi-tier tax on the same products and services. If the government can consider accepting our appeal, this will help to assist our members and the construction industry to get some much-needed relief with the current service tax increase,“ he said in a statement today.

This comes as the association and the broader construction industry expressed their concerns as the service tax increased to 8 per cent from 6 per cent and with logistics services to be taxed at 6 per cent come April 1, 2024.

Wee said the increase, especially with the broader inclusion of logistics services, poses a threat to the construction industry and its stakeholders.

The added financial burden on consumers would inevitably result in an upsurge in the cost of goods, affecting the affordability and accessibility of construction materials.

“Members of the MBAM fear that such a tax hike could impede economic growth. The construction sector, being a vital pillar of Malaysia’s economy, plays a pivotal role in creating jobs and fostering infrastructure development. Any hindrance to its progress will have far-reaching consequences on employment rates and national prosperity,“ he said. -Bernama