KUCHING: Industries are urged to exercise responsibility and avoid exploiting the recent sales and service tax (SST) hike.
Starting March 1, the SST rate for most services, including overseas-based digital services, will increase to eight per cent from the current six per cent.
Currently, only food and beverage, telecommunications, and vehicle parking services are exempt from the tax hike.
Previously untaxed services like karaoke outlets, delivery services, brokerage, and underwriting services will now be subject to the SST.
The increase in tax rates and taxable items was announced as part of taxation reforms in Budget 2024 last year, aligning with the government’s efforts to boost the country’s financial resilience while reducing its budget deficit.
Minister for Tourism, Creative Industry and Performing Arts, Datuk Seri Abdul Karim Rahman Hamzah pointed out that relevant industries, if increasing their prices following the SST hike, should ensure proper tax compliance.
“Manage the prices properly and ensure that all taxes contribute to the government’s coffers because the federal government needs that money to govern our nation,” he said during a press conference on the Sarawak Bumiputera Amateur Golf Association (PGABS) Interstate Junior Golf Tournament at Baitulmakmur Building II here on Friday (Mar 1).
Regarding consumers being taxed eight per cent service tax if their electricity bill exceeds RM220, Abdul Karim noted that this initiative encourages consumers to save on electricity usage.
While Sarawak is not part of the initiative, he highlighted that the electricity tariff in Sarawak is significantly lower than what consumers in Peninsular Malaysia are paying.
“As far as Sarawak is concerned, we are not part of Tenaga Nasional Berhad… our electricity bill paid goes directly to the state,” he said.
