SST increased to 8 percent? What does this mean?

On March 1, Malaysia was taken aback by the announcement of a 2% increase in the Sales and Service Tax (SST), rising from 6% to 8%. This increase sparked a stir among the public, with many concerned about its impact on the cost of living.

Although it’s stated that the SST has risen to 8%, we need to understand that this refers to an increase in the service tax only, while the sales tax remains at a rate of 10%. For some goods under the sales tax, the rate is even at 5%.

Let’s look at some things that have increased, the expanded scope, and what remains at a rate of 6%. First, among the services that have experienced an increase include accommodation, nightclubs, private homes, golf courses, recreational fields, lottery betting centers, gambling, and professional services.

The scope of the service tax expansion involves logistics services, warehouse logistics management, freight forwarding management, shipping, chains, delivery and transportation of goods, documents, or packages through e-commerce platforms, and courier services. It’s important to remember that this increase does not apply to all types of services.

This change also affects e-commerce platforms like Shopee. A 6% service tax will be included in the shipping cost, and if there are redeemable discounts for shipping, the tax will be calculated after deducting the discount.

Although there is an increase in the service tax, it’s important to understand that not all services will be affected. Basic services such as food or drink provision, telecommunications, vehicle parking space provision, and credit card services remain at a rate of 6%.

This SST increase is expected to help the government increase revenue and improve the country’s financial position. At the same time, it provides room to provide assistance and cash rebates to those who need it more.

To prevent unreasonable price increases, the government has established laws under the Price Control and Anti-Profiteering Act 2011. Individuals or companies that profiteer can be fined or imprisoned. If citizens see any unreasonable price increases, they have the right to make complaints through the EZAdu and EAduan apps of the Ministry of Domestic Trade and Consumer Affairs.



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