- Sales Tax Adjustments: From 1 July 2025, sales tax will remain at 0% for essential goods while imposing 5% and 10% rates on non-essential and luxury items, respectively, as part of a broader tax reform strategy outlined in Budget 2025.
- Service Tax Expansion: The service tax scope will now cover additional sectors, including rental, construction, finance, healthcare, and education, with specific revenue thresholds and exemptions designed to mitigate double taxation and support essential services.
- Legislative Changes: A series of subsidiary legislation and amendment orders related to the sales and service tax have been issued and will take effect concurrently on 1 July 2025, revoking previous regulations.
Sources
- Sales Tax (Rate of Sales Tax) Order 2025 (PU(A) 170/2025), which revokes PU(A) 176/2022;
- Sales Tax (Goods Exempted from Sales Tax) Order 2025 (PU(A) 171/2025, which revokes PU(A)175/2022;
- Service Tax (Amendment) Regulations 2025 (PU(A) 172/2025);
- Service Tax (Rate of Tax) (Amendment) Order 2025 (PU(A) 173/2025); and
- Service Tax (Persons Exempted from Payment of Tax) (Amendment) Order 2025 (PU(A) 174/2025).
