Malaysia’s SST rate set to increase from 6 to 8 pct effective March 1, 2024

Anwar holding the 2024 National Budget in a messenger bag as he departs to the Parliament on Oct 13, 2023. Photo credit: Anwar Ibrahim Facebook

KUCHING, Jan 2: Malaysia’s sales and services tax (SST) rate will increase from 6 to 8 per cent effective March 1, 2024.

However, the SST increase will not apply to services such as food and beverages (F&B) and telecommunications where the rate will be maintained at 6 per cent.

Prime Minister Dato Seri Anwar Ibrahim announced this when presenting the 2024 Budget in Parliament on Oct 13, 2023.

“The government will also expand the scope of taxable services to include logistics services, brokerage, guarantee sponsors and karaoke clubs,” he said.

Additionally, Anwar disclosed the government will enforce the implementation of Capital Gains Tax for the disposal of unlisted shares by local companies based on net profit at a rate of 10 per cent from March 1, 2024.

This is part of the unity government’s reform measures to expand the country’s revenue base and at the same time not burden the majority of the people.

Malaysia is one of the lowest tax revenue collectors in Southeast Asia with gross domestic product (GDP) standing at 11.8 per cent in 2021, compared to Singapore (12.6 per cent), Thailand (16.4 per cent), the Philippines (18.1 per cent) and Vietnam (18.2 per cent), according to Organisation for Economic Cooperation and Development (OECD).

On a separate matter, many parties have recently called for traditional and complementary medicine (TCM) to be exempted from SST.

This came after Malaysian Chinese Medical Association (MCMA) president Dr Heng Aik Teng confirmed that traditional Chinese medicine practitioners had received a letter in December, notifying them of a retrospective imposition of 6 per cent SST on TCM services from 2018 and that they are given a grace period until May to pay up the arrears without any penalties. — DayakDaily