GET ready to pay more for your favourite imported delicacies! Starting tomorrow, several luxury food items and imported goods will see their Sales and Service Tax (SST) rates increase.
King crab, salmon and cod fish, truffle mushrooms, and imported strawberries are among the premium items that will now carry a 5% SST rate. Other items affected include essential oils, silk products, and industrial machinery.
However, some luxury items will maintain their current 5% rate, including abalone and lobster, quinoa, cheese, fruit jams, and smartphones.
Meanwhile, certain products are getting hit even harder with tungsten scrap waste, racing bicycles, and antique hand paintings jumping to a 10% SST rate.
Items like caviar, shark fins, alcoholic beverages, cigarettes and cigars, and leather goods will keep their existing 10% rate without any changes.
Beyond goods, the SST scope is expanding to cover six types of services including rental or leasing services, construction work, financial services, private healthcare, education services, and beauty services.
The government announced these SST revisions and expansions in Budget 2025 to strengthen the country’s fiscal position, increase revenue collection, broaden the taxation base, and improve social safety net quality without burdening the majority of citizens.
These changes particularly affect higher-income consumers who regularly purchase imported luxury foods and premium services.
For most Malaysians, daily essentials remain largely unaffected, as the government has targeted items typically consumed by those with higher disposable income.
The changes take effect from July 1, 2025, giving businesses and consumers minimal time to adjust to the new rates.
Restaurants serving premium imported seafood like king crab and salmon may need to adjust their pricing, potentially affecting fine dining experiences.
Similarly, beauty salons, private medical clinics, and educational institutions will need to factor in the new service tax rates.
This move reflects Malaysia’s broader strategy to diversify revenue sources while maintaining social equity by focusing tax increases on luxury and non-essential items.
The expansion of SST to services marks a significant shift in the country’s taxation landscape, bringing Malaysia closer to comprehensive consumption tax models used in other developed economies.
