By DayakDaily Team
KUCHING, June 11: Democratic Action Party Socialist Youth (Dapsy) Sarawak has called on the federal government to postpone the planned expansion of the Sales and Services Tax (SST), warning that the policy could cause compounded financial strain on businesses and the public if implemented amid ongoing trade tariff discussions with the United States.
Dapsy Sarawak treasurer Wong King Yii today voiced concern over the short timeline for the SST expansion set to take effect on July 1, saying the move could hit businesses hard, particularly in adapting to new compliance and reporting requirements at such short notice.
“While I support the Malaysia government’s broader objective of expanding the tax base to strengthen national revenue and promote long-term economic growth, the short implementation timeframe poses significant operational challenges for businesses,” he said in a statement today.
The SST expansion will cover six new service sectors—leasing, construction, finance, private healthcare, education, and beauty services—with tax rates ranging from 6 to 8 per cent. Small businesses under specific revenue thresholds are expected to be exempt.
The government has said the move is intended to generate more revenue for improving public services and strengthening the social safety net without directly burdening the majority of citizens.
However, Wong cautioned that the cumulative effect of SST-related cost increases, alongside the possibility of new tariffs from the United States, could create a double economic shock.
“There is a real risk that the cumulative impact of SST-related cost increases, alongside potential tariffs imposed by the US, will result in compounded financial strain on both the business community and the public,” he said.
In view of this, he urged the federal government to adopt a “more coordinated and deliberate approach” by deferring the SST expansion until the trade talks with the US conclude.
Wong also called for a revision of the exemption threshold for lessees qualifying as micro, small, and medium enterprises (MSMEs).
He proposed raising the current RM500,000 annual sales threshold to RM1 million to ensure more MSMEs are shielded from sudden cost increases.
“This adjustment is vital to help SMEs weather the financial uncertainties that may result from both domestic tax changes and external trade developments,” he added.
In light of these concerns, Wong called on the government to review and delay the implementation of the expanded SST to ensure the policy does not cause disproportionate harm to the people and SMEs across Malaysia. — DayakDaily
