- FMM urges the government to reassess and defer the expansion of the Sales and Service Tax (SST).
- The expanded SST is set to be enforced on July 1, 2025.
- FMM warns that the expansion is premature and could harm the business and investment climate.
- The expanded SST will impose a 5% tax on 4,806 tariff lines previously exempt.
- Only 359 HS codes remain exempt or zero-rated, mainly essential goods.
- Approximately 97% of goods would now be subject to sales tax.
- The expansion shifts the tax base from consumer-based to include businesses and all supply chain stages.
- Tax coverage now includes machinery and equipment, potentially hindering industrial upgrades.
- A grace period is announced with no penalties for non-compliance until December 31.
- Businesses have less than three weeks to prepare for the changes.
- FMM highlights the lack of consultation on the service tax expansion.
Source: themalaysianreserve.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
