By DayakDaily Team
KUCHING, June 13: The federal government has been urged to review the expanded Sales and Service Tax (SST), which is expected to take effect on July 1.
In a press statement, Sarawak United Peoples’ Party (SUPP) Stakan chairman Dato Sim Kiang Chiok said the move is expected to significantly increase the cost of living and compliance burden on businesses across Malaysia, including Sarawak.
“While essential goods such as rice, vegetables, meat, milk, and medicines remain exempt from the sales tax, many non-essential items will now incur a five to ten per cent SST.
“Items affected include imported fruits, seafood like salmon and cod, essential oils, silk, industrial machinery (five per cent), and even road bicycles and antique artworks (10 per cent). These taxes will indirectly impact households and small businesses that rely on these products for daily operations or services,” he said.
He added that the scope of the service tax has also widened to the following:
- Rental/Leasing Services (eight per cent tax): Applies to providers earning over RM500,000 annually.
- Construction Services (six per cent tax): The threshold is set at RM1.5 million, with limited exemptions.
- Financial Services (eight per cent tax): Fee-based services are taxed, excluding basic banking and Islamic financing.
- Private Healthcare (six per cent tax): Tax imposed on services for foreigners.
- Private Education (six per cent tax): Applies to institutions charging over RM60,000 per student annually, as well as to international students in higher education.
- Beauty Services (eight per cent tax): Taxed once revenue exceeds RM500,000 annually.
“These come on top of other business cost pressures, such as the new Sarawak Labour Law effective May 1, which shortens work hours and increases maternity leave from 60 to 98 days, the minimum wage increase from RM1,500 to RM1,700, and the mandatory e-invoicing system for all businesses next year.
“With the potential removal of RON95 petrol subsidy looming, the combined impact will dampen entrepreneurship, reduce competitiveness, and increase living costs in Sarawak and nationwide,” he said.
Sim, who is also the advisor for the Sarawak Housing and Real Estate Developers’ Association (SHEDA), said that to compound matters, the resumption deadline of the US tariff impositions on worldwide goods—expected on early July 2025—has already rattled global markets, causing economic uncertainty and slowing global trade. For Malaysian businesses, this adds more pressure and clouds the outlook for 2025.
“With the cost of living rising and business sentiment weakening, the federal government should review these measures holistically and adopt a more balanced approach that supports small businesses and protects consumer welfare in these challenging times,” he said. — DayakDaily
