From 1 July onwards, certain items and services will now be subjected to SST that ranges from 5 to 10%. The government has rolled out a broader Sales and Service Tax (SST) to cover more luxury and non-essential goods and services, aiming to boost public funds while keeping daily essentials tax-free.

Here’s a quick look at the essential items that remain exempt:

• Rice, cooking oil, sugar, flour
• Local fish and vegetables
• Books and printed materials
• Medicines and medical devices
• Cement, sand, and other basic construction materials

These changes ensure your everyday essentials stay affordable while helping the government fund improvements that benefit everyone.

With that said, here are the list of things that will be affected by the SST expansion:

Goods now with 5% sales tax:

• Imported fruits except apples, oranges, mandarin oranges and dates.
• Premium seafood (salmon, cod, king crab)
• Truffles
• Essential oils and silk
• Smartwatches and baby strollers
• Selected industrial machinery
• Lifestyle and other non-essential imported items

Goods now with 6% Service Tax:

Construction Services (6%)

• Applies to service providers with revenue exceeding RM1.5 million.
• Exemptions:
  • Residential and public housing projects.
  • Business-to-business transactions to avoid double taxation.
• A 12-month grace period is given for existing contracts.

Private Healthcare (6%)

• Applies only to services provided to non-citizens.
• Malaysians are fully exempt, including:
  • Traditional and complementary medicine:
    • Malay, Chinese, and Indian treatments
    • Islamic medicine, homoeopathy, chiropractic
  • Allied health services:
    • Physiotherapy, audiology, speech therapy

Private Education (6%)

• Applies to:
  • Private preschools, primary, and secondary schools charging over RM60,000 per year.
  • Private higher education institutions for international students.
• Exemptions: Malaysian citizens and persons with disabilities.

Services now with 8% Service Tax:

Financial Services (8%)

• Applies to fee-based or commission-based services such as loan processing fees.
• Exemptions:
  • Business-to-business transactions
  • Basic banking services (savings/current account fees)
  • Islamic financing
  • Foreign exchange gains
  • Capital markets
  • Outward remittances
  • Shariah-compliant fee structures
  • Bursa Malaysia
  • Labuan entities

Leasing and Rental Services (8%)

• Applies to businesses earning over RM1 million annually in leasing or rental services.
• The SST registration threshold has been raised from RM500,000 to RM1 million to protect smaller businesses.

Goods now with 10% sales tax:

• Luxury bicycles (like racing bikes)
• Antique artworks
• Caviar and other premium niche foods

Finance Minister II Datuk Seri Amir Hamzah Azizan shared that the SST expansion is part of Malaysia’s push to strengthen its economy under MADANI reforms, focusing on luxury and non-core items while keeping essentials within reach for everyday Malaysians.

The additional funds collected through these targeted tax updates will help improve public services, expand infrastructure, and increase direct aid for the people.

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