Starting July 1, the Finance Ministry will implement an expanded Sales and Service Tax (SST) framework that will affect various goods and services. While basic necessities remain exempted, non-essential items will see sales tax rates of 5% or 10%, and several service sectors will now fall under the expanded service tax net, ranging from 6% to 8%.
 
Below is a summary of the updated tax structure:
 
Sales Tax | 0% (Exempted Items)
 
Essential goods such as:
 

• Poultry and seafood: chicken, beef, mutton, fish, prawns, squid
• Food staples: vegetables, local fruits, rice, barley, oats, wheat, flour, sugar, salt, white bread, pasta, noodles, instant noodles
• Household items: cooking oil, canned sardines, milk
• Medical needs: medicine, medical devices
• Reading materials and pet food

 
Also exempted:
 

• Construction materials: cement, stones, sand
• Agricultural sector: fertilisers, pesticides, machinery for agriculture and livestock

 
5% Sales Tax | Applies to selected non-essential and luxury goods:
 

• Certain seafood and imported items: king crabs, salmon, cod, truffles, imported fruits
• Specialty goods: essential oils, silk
• Equipment: industrial machinery

 
10% Sales Tax | Levied on:
 

• Road bicycles
• Antique hand-painted artworks

 

Service Tax

 
1. Rental or Leasing Services – 8%
 
Applies to service providers with annual income exceeding *RM500,000*.
 
Exemptions:
 

• Residential building rentals
• Reading materials, financial leases, and overseas asset leases
• MSMEs with turnover under RM500,000
• Business-to-business (B2B) transactions
• Non-reviewable contracts (12-month exemption)

 
2. Construction Services – 6%
 
For providers with contracts exceeding RM1.5 million.
 
Exemptions:
 

• Residential buildings and public housing-related amenities
• B2B transactions
• Non-reviewable contracts (12-month exemption)

 
3. Financial Services – 8%
 
Applies to fee- or commission-based services.
 
Exemptions:
 

• Basic financial services for Malaysians
• Islamic financing (profit-based)
• Foreign exchange, remittances, capital market gains
• Export-related financing and specific insurance/takaful services
• B2B and Bursa Malaysia/Labuan-related services

 
4. Private Healthcare – 6%
 
Applies to private medical, traditional and complementary medicine, and allied health services for foreigners from providers with income over RM1.5 million.
 
5. Education Services – 6%
 
Applies to:
 

• Private preschools, primary and secondary schools with annual fees exceeding RM60,000 per student
• Private higher education institutions *for international students*

 
Exemption:
 

• All Malaysian students
• Disabled Malaysian students in private schools

 
6. Beauty Services – 8%
 
Includes hairdressing, facial treatments, and similar services from providers earning over RM500,000 annually.
 


 

 

 

 

 

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This expansion of SST is aimed at broadening the tax base while protecting essential goods and services.

Source : Bernama 
Image Credit : Sinar Harian , YouTube Papa Li , Astro Awani