TCM practitioners oppose imposition of SST, seek government reconsideration

KUCHING: Traditional Chinese medicine (TCM) services providers here has opposed the imposition of an 8 percent Sales and Services Tax (SST) on TCM services, urging the government to reconsider its decision

Sarawak Traditional Chinese Physicians Association president Dr Tony Kong expressed shock over reports mentioning the implementation of an 8 percent SST on TCM services, considering it unprecedented in his years of practising Chinese medicine.

Dr Tony Kong

“In all my years practising Chinese medicine, I have never heard of such a tax being imposed on TCM services, so the announcement came as a surprise.

“I believe this is entirely unreasonable and will have a detrimental impact on the TCM industry, increasing the economic burden on patients seeking TCM consultations.

“The authorities should immediately announce the cessation of this practice,” he told New Sarawak Tribune.

According to reports, he said the Traditional and Complementary Medicine Division of the Health Ministry (MOH) issued a letter on Dec 14, 2023, informing traditional and complementary medical services providers that they are required to pay SST.

“The Customs Department will also retrospectively calculate taxes for previous years, and businesses are encouraged to participate in a voluntary declaration programme. However, the details of these measures were not disclosed.

“If we follow the letter from the MOH’s Traditional and Complementary Medicine Division, it appears that those seeking TCM services will be required to pay an 8 percent SST, with the Customs Department retroactively calculating taxes for past years.

“It seems that this unreasonable policy has been implemented for quite some time, yet TCM practitioners were unaware of it,” he said.

He said the TCM association has not received any official letter from the authorities.

“But, we will actively follow up on this matter. I also urge all TCM organisations in the country to unite and strongly oppose this matter (imposition of 8 percent SST on TCM services),” he said.

The government, he added, must also seriously consider exempting TCM from SST tax, as private medical facilities and services registered under the Private Healthcare Facilities and Services Act of 1998 are exempt from such taxes.

“TCM should be granted the same exemption as modern western medicine services,” he said.

Meanwhile, Kuching Chinese Physician Association Sarawak president Ho Kim Liung also echoed Dr Kong’s views.

Ho Kim Liung

“From the standpoint of our association, I also opposed the imposition of the 8 percent SST on traditional medicine,” he said.

He also said that he looks forward to some good news from the federal government as a meeting has been held between the MOH and Ministry of Finance (MOF) to discuss the matter.

“Meanwhile, Deputy Premier Datuk Amar Dr Sim Kui Hian has also raised the matter to the MOH and we hope the issue can be resolved as soon as possible,” said Ho.

The Malaysia Budget 2024 proposed to broaden the tax base to a new capital gains tax (CGT), a new luxury goods tax, an expansion on the scope of the SST, a 2 percent increase in the SST rate from 6 to 8 percent, an expansion of the application of stamp duty, and the introduction of a global minimum tax (GMT).

It was stated that the raise of SST rate from 6 percent to 8 percent will take effect on March 1, 2024, but will not include services such as food, beverages and telecommunications.

The taxable services will expand to include logistic services, brokerage, underwriting and karaoke.