Service tax, or SST, is the tax charged and levied on taxable services provided in Malaysia – and while we may grumble about having to pay more with our bill, there’s no denying the importance of it. Last year, the government announced through the Budget 2024 that several sectors will increase their SST rates from 6% to 8%.
The new rate will be in effect starting 1st March (Friday). While the list has yet to be confirmed, many tax experts have weighed in on the issue, sharing which sector they think will be affected by the hike.
Here is the list of services expected to increase to the 8% service tax beginning 1st March 2024:
- Accommodation
- Domestic flight services
- Nightclubs and dance halls
- Private clubs
- Golf clubs, driving ranges
- Betting and gaming
- Subscription services
- Overseas-based digital services
- Professional services
- Credit cards
- Insurance and Islamic insurance
- Advertising services
- Other service providers
Before the tabling of Budget 2024, the list of sectors with 6% taxable services include accommodation, food and beverage, entertainment centres, recreational clubs and gaming. The government previously announced that the food and beverages, telecommunication services and vehicle parking services would remain at 6%. Logistic services were previously non-taxable but will implement a 6% tax starting in March.
However, experts highlighted the need to specify the types of services under each bracket for the convenience of consumers and businesses. One example provided was a wedding package that includes multiple services, including accommodation and food and beverage, which fall under different tax categories.
The Customs Bureau is expected to announce more information soon but is waiting for approval from the Ministry Of Finance. There will be adjustments to the list – but what do you think about it so far? Are you prepared to pay more for service tax?
Sources: China Press, The Star (1)(2)
