Starting July 1, the government will implement a review of the Sales and Services Tax (SST) including imposing a sales tax of between 5% and 10% on non-essential goods and expanding the scope of service tax to sectors that were previously exempt.
According to a statement from the Ministry of Finance, the zero-rate sales tax will be maintained for basic goods, but non-essential goods will be taxed at a rate of 5% to 10%.
At the same time, service tax will also be expanded to include rental and leasing, construction services, financial services, as well as the private education and health sectors.
Minister of Finance II, Datuk Seri Amir Hamzah Azizan said that the SST review is expected to increase the country's revenue collection to RM51.7 billion in 2025 by RM5 billion compared to the current projection of RM46.7 billion.
He also explained that this measure was implemented after a process of engagement with various stakeholders, including industry associations and tax agents, to ensure that its implementation does not burden the people.
He said that the expansion measure will be accompanied by certain exemptions to avoid double taxation and ensure that the people are not taxed on critical basic services.
He added that the government will take a targeted approach to ensure that this review does not have a major impact on the majority of the people, in line with the government's commitment to implementing economic reforms in stages.
However, despite the assurances, the implementation of this broader tax is sure to raise questions among the people, especially when more and more people are starting to voice that even a salary of RM5,000 a month is not enough to live comfortably in the city.
When almost all aspects of life begin to be taxed, perhaps these voices are not just complaints... but reality.
