During the tabling of Budget 2024 last October, prime minister and finance minister Anwar Ibrahim announced that the sales and service tax (SST) rate will be increased from 6% to 8%. This was announce to be effective starting 1 March, which is today, so expect most things to see a small jump in price moving forward.
In case you missed it, this will not apply to a small number of services. These are ones related to food and beverages, as well as telecommunication, which will remain at the previous 6% SST rate. There’s the possibility of electricity and water bills being part of the exception, but the government has not come to a final decision on this yet.
On the flip side, what is definitely being affected by the 2% increase in SST rate are e-commerce platforms and streaming services. On the former, platforms like Lazada and Shopee have already indicated their implementation of this change, mostly via the way it would affect sellers on their respective platforms. According to Amanz, customers will also see its effects via a new item in the Payment Details section labelled as Shipping Fee SST, which is dependent on the shipping costs after discounts.
Despite the increase in SST rate, tax collected in Malaysia is still among the lowest in Southeast Asia at 11.8% GDP. That being said, the increase in tax rate is expected to increase government revenue from under RM30 billion last year according to Astro Awani.
(Source: Lazada, Shopee, Amanz, Astro Awani)
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