Govt Expects Additional SST Revenue Of RM5 Bln In 2025, RM10 Bln In 2026 Following Revision

PETALING JAYA, June 18 (Bernama) -- The Sales and Service Tax (SST) collection is expected to increase by RM5 billion in 2025 and by RM10 billion in 2026 following the review and expansion of the tax scope, which will be implemented starting July 1.

Treasury secretary-general Datuk Johan Mahmood Merican said the additional amount is due to the SST review aimed at broadening the national revenue base.

“The government has taken a progressive approach by expanding the tax base, with the tax burden being skewed towards those who can afford it.

“This means that when determining the scope and those who are subject to the Service Tax, as well as the Sales Tax approach, efforts have been made to ensure it is implemented in a targeted manner,” he told Bernama after a visit to the Royal Malaysian Customs Department here.

Previously, Finance Minister II Amir Hamzah Azizan had projected that the improved SST would generate revenue of RM51.7 billion in 2025, up from the earlier SST collection forecast of RM46.7 billion.

On June 9, the government announced a targeted revision of the Sales Tax rates as well as expansion of the scope of the Service Tax, effective July 1, 2025.

The Sales Tax rate remains unchanged for essential goods, while a rate of either five or 10 per cent applies to discretionary and non-essential goods.

The scope of the Service Tax will be expanded to include new services such as leasing or rental, construction, financial services, private healthcare, education, and beauty services.

Meanwhile, Johan noted that companies will only need to charge the Service Tax beginning September to give them time to make preparations.  

“In July, service providers would need to establish whether they have reached the annual revenue threshold that makes them subject to the Service Tax. At the end of the month, they need to review their position to ensure eligibility. 

“If the revenue threshold is reached, the registration process begins in August; and only after that will invoices be issued for the taxable services provided,” he added.