With the world reacting to the announcement of President Trump’s tariffs in April, Malaysians now have their version of “Liberation Day” on a smaller scale, of course. Starting 1st July 2025, the government will implement a revised, expanded version of sales and service tax (SST) that will affect everything from beauty services to private education.
Announced by Finance Minister II Datuk Seri Amir Hamzah Azizan, the decision for the expansion is part of the MADANI economic reform aimed at strengthening government revenue. “The additional revenue will go towards improving public services and infrastructure, and increasing direct aid to Malaysians”, he states during a closed-door briefing with the press. Here’s what’s increasing in price next month:
1. 0% Tax Or No Change In Tax
Starting next month, here is the list of things that remain in the 0% sales tax bracket:
- Unprocessed items (Beef, chicken, prawn, fish, etc.)
- Local fruits
- Grains (Rice, Oat, Barley and wheat), sugar, cooking oil
- Milk
- Flour, pasta, noodles
- Canned Sardines
- Medicine, pet food
- Books, journals, newspapers
Items with no changes in the 5% and 10% sales tax bracket:
- Lobster
- Quinoa, Cheese, Fruit Jams
- Smartphones
- Caviar
- Alcoholic beverages, Cigarettes
- Leather goods
2. Revised Items In The 5% Tax Bracket
- King Crab, Salmon
- Truffles
- Imported strawberries
- Essential oils, Silk
3. Revised Items In The 10% Tax Bracket
- Racing bicycles
- Antiques and hand-painted artwork
The government has also expanded service tax to these 6 sectors, which include beauty services and rental, and leasing. An extra 8% tax will apply to beauty service businesses earning over RM50,000 in a year, which covers services such as facials, hairdressing, body slimming and tattoo services. An 8% service tax will also be imposed on rental or leasing services earning up to RM500,00 manually, with exemptions for residential rentals, reading materials and MSMEs (Micro, small and medium enterprises).
Malaysians are exempt from the 6% private healthcare and private education tax, which only applies to non-citizens. To give companies time to adapt, the government will not take punitive action until the end of the year. What do you think about the revised SST?
Sources: The Star, The Edge Malaysia
Alyssa Gabrielle contributed to this article
