KUALA LUMPUR, Nov 24 — The government does not plan to reassess the Sales and Service Tax's (SST) scope, considering that its implementation has been drafted with targeted and progressive mitigation measures, said the Finance Ministry (MOF).
The mitigation measures for the expanded SST scope, which took effect on July 1, 2025, are aimed at ensuring that the tax burden is distributed fairly and borne by parties with the capacity to do so.
“These measures ensure that the expanded SST scope is implemented prudently and does not burden consumers as well as small and medium enterprises (SME).
"Instead, it supports efforts to enhance national revenue gradually to ensure long-term fiscal sustainability without affecting domestic economic growth,” it said in a written reply to the Dewan Rakyat published on the Parliament’s website today.
The MOF was responding to Kepong MP Lim Lip Eng's query on whether the government planned to review the expansion of the SST scope in view of concerns that additional cost implications might lead to price increases and subsequently burden SMEs and consumers.
It added that to ensure SMEs remain competitive and are not burdened by the implementation, the government has provided several specific facilities and exemptions.
Among the measures taken by the government is the setting of a high registration threshold for newly taxable services: RM1 million per year for rental or leasing services and fee-based financial services, as well as RM1.5 million per year for construction services and private healthcare services.
In addition, the government has mobed to exempt service tax for rental or leasing services provided to small traders with annual incomes of less than RM1 million.
Based on the Consumer Price Index for October 2025, the Malaysia Statistics Statistics said the country's inflation rate remained low at 1.3 per cent compared with 1.5 per cent in September 2025.
“This was driven by more moderate price pressures in major household expenditure groups such as food, housing, and utilities. This inflation environment indicates that revenue-enhancing measures, including the expansion of the SST scope, can be implemented without exerting significant pressure on the cost of living,” it said.
