By DayakDaily Team
KUCHING, Jan 6: In a major relief for businesses, the federal government has cut the Service Tax on rental and leasing services from eight per cent to six per cent, effective Jan 1, 2026, in a move designed to ease costs and stimulate the industry.
Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim also announced that Micro, Small, and Medium Enterprises (MSMEs) will enjoy a higher exemption threshold, with annual sales limits increased from RM1 million to RM1.5 million.
In a statement on Monday (Jan 5), Ministry of Finance (MOF) stated that newly registered MSMEs will receive a one-year exemption on rental and leasing services starting from their registration date.
It further outlined exemptions on Sales Tax for essential raw materials and inputs used by registered manufacturers, including animal feed, fertilisers, and pesticides, to help control prices of basic goods for the public.
Service Tax exemptions for construction contracts signed before 1 July 2025 without reviewable clauses have been extended for another year until 30 June 2027.
In addition, construction of places of worship, including mosques, churches, temples, suraus, and shrines, is fully exempt from Service Tax from July 1, 2025.
The ministry said these measures are part of a broader effort to support business growth, strengthen MSMEs, and ensure affordability of essential goods across Malaysia. — DayakDaily
