SIX major business associations have jointly called on the government to delay the planned expansion of the Sales and Service Tax (SST) to include commercial rental services, due to take effect on 1 July.
The group expressed concern that the policy would increase operating costs for industry players and trigger a chain reaction of higher rental rates and consumer prices.
Speaking on behalf of the coalition, a spokesperson told Sinar Harian: “The implementation of SST on commercial rentals will significantly impact local retail operators, particularly micro, small, and medium enterprises (MSMEs), who make up the majority of business tenants.
“In the current climate of economic uncertainty, this policy will add financial pressure to retail traders still recovering from the pandemic,” the spokesperson added in a joint statement issued on Tuesday.
The coalition comprises the Malaysia Retailers Association (MRA), Bumiputera Retailers Organisation (BRO), Malaysian Franchise Association (MFA), Malaysia Retail Chain Association (MRCA), Malaysia Shopping Malls Association (PPK), and the Malaysian Associated Indian Chambers of Commerce and Industry (MAICCI).
The Finance Ministry had earlier announced that the SST scope will be widened beginning 1 July 2024, covering several professional services, including commercial rental.
As part of the restructuring, the SST rate will be increased from six to eight percent—excluding food and beverage services and telecommunications, which remain at six percent.
The Ministry said the SST expansion forms part of a broader national fiscal restructuring initiative, aimed at ensuring tax equity by covering previously untaxed sectors.
However, the business groups urged the government to reconsider the move and allow further consultations with key stakeholders before implementation. - June 17, 2025
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