KUCHING, Dec 31: Chinese medicine services operators here are allegedly in shock after they were told to pay service tax arrears dating back from 2018 to 2023 by May 2024.
According to Sarawak United Peoples’ Party (SUPP) Women chief Kho Teck Wan, these operators were not formally informed about the tax imposed on their services.
She also said some practitioners only knew of the tax collection when they receive a demand letter about a month ago.
“As the news on the collection of Sales and Services Tax (SST) on Chinese medicine services gains traction, I started to receive similar information from operators of physiotherapy and chiropractic centres.
“The operators were told to pay the backdated (due) SST and start collecting SST on their services from Jan 1, 2024.
“With such short notice and no formal letter or public announcement from the government, these operators were caught by surprise of the ‘backdated’ (due) tax they need to pay and stressed over the potential penalty that maybe imposed on them should they failed to pay the taxes,” she said in a statement today.
Since Prime Minister Dato Seri Anwar Ibrahim has announced that SST will not be imposed on essential services, Kho argued for and urged the federal government to classify Chinese medicine, chiropractic and physiotherapy services as essential services and not subject to SST.
As Malaysia moves toward the post-Covid-19 economy recovery period, she also expressed concern over the negative impact of backdated SST collection and tax rate increase on medical services and the financial status of the country’s medical services sectors as well as patients who need the said services.
“It is with great hope that I urge the government to reconsider the enforcement of ‘backdated’ (due) SST and implementation of SST on these medical services.
“To avoid confusion and to maintain transparency, I would also like to urge the federal government to publish a full list of services that are subjected to SST, with their effective implementation dates,” she added.
The Malaysia Budget 2024 proposed to broaden the tax base to a new capital gains tax (CGT), a new luxury goods tax, an expansion on the scope of SST, a 2 per cent increase in the SST rate from 6 to 8 per cent, an expansion of the application of stamp duty, and the introduction of a global minimum tax (GMT).
It was stated that the increase in SST rate from 6 to 8 per cent will take effect on March 1, 2024 but will not affect services such as food, beverages and telecommunications.
The scope of taxable services will be expanded to include logistics services, brokerage, underwriting and karaoke. — DayakDaily
