What's New: Sales Tax and Service Tax
What's New: Sales Tax and Service Tax
On 9 June, The Ministry of Finance announced revisions to the Sales Tax and Service Tax effective 1 July 2025. The measures, which were first announced in Budget 2025, are aimed at broadening the country’s tax base and increasing revenue.
In this commentary, we will delve into the key changes and updates on:
In this commentary, we will delve into the key changes and updates on:
SALES TAX
Revision of the sales tax rates on non-essential goods
- Sales Tax at rates of 5% or 10% will apply to discretionary and non-essential goods. This includes, but not limited to, goods such as king crab, salmon and cod, painting, drawings, prints and sculptures, cruise ships, and aeroplanes.
- A sales tax rate of 0% is maintained on most essential food items consumed by the rakyat.
SERVICE TAX
Expansion of the Service Tax scope
- The service tax framework will be further expanded to include additional services in the Healthcare, Finance and Wellness Centre sectors as well as introduce 3 new service groups i.e. Groups K (Rental and Leasing), L (Construction Works), and M (Education).
- In line with the Budget 2025 announcement, such services comprises those operating under a fee-based model.
Access our full commentary below to learn more.