Revised SST to take effect from 1st July 2025
In case you have yet to hear, the revised Sales and Service Tax (SST) framework will officially take effect on 1st July 2025, following announcements made under Budget 2025.
This move aims to strengthen Malaysia’s fiscal position by increasing public revenue and broadening the tax base, while maintaining essential protections for everyday consumers.
Malaysia’s revised Sales and Service Tax (SST)
Image credit: Kelvin Zyteng via Unsplash
Under the updated system, the sales tax structure will continue to exempt essential items such as rice, vegetables, local fruits, cooking oil, milk, white bread, and medical supplies.
Books, livestock feed, fertilisers, and basic construction materials also remain in the zero-rated category.
Certain luxury or non-essential goods will face increased sales tax rates. Items like caviar, truffles, imported strawberries, and antique hand paintings will now be taxed at 10%, while others, such as salmon, silk, and essential oils, move into the 5% bracket.
The scope of the service tax will broaden to cover six additional sectors: rental and leasing, construction, financial services, private healthcare, private education, and beauty services. Rates range from 6% to 8%, depending on the sector.
Reliefs are in place to prevent double taxation for business-to-business (B2B) transactions, and exemptions are available for residential services, public education, Malaysian healthcare, and qualifying small businesses.
The Finance Ministry highlighted that the revised SST is designed to support the country’s economic resilience and social protection systems.
Strengthening revenue without burdening the rakyat
By focusing tax adjustments on higher-value goods and expanding service coverage responsibly, the government aims to raise revenue while minimising impact on the everyday cost of living.
This balanced approach reflects a commitment to long-term financial sustainability without overburdening the rakyat.
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Cover image adapted from: Kelvin Zyteng via Unsplash & Daniel Bernard via Unsplash