Malaysia

MOF revises Sales and Service Tax framework following public feedback

Government reiterates key imported fruits exempted while raising business tax thresholds and drops proposed levy on beauty services

Updated 1 year ago · Published on 27 Jun 2025 3:08PM

MOF revises Sales and Service Tax framework following public feedback
The review is aimed at easing cost-of-living pressures and supporting small businesses - June 27, 2025

THE Ministry of Finance (MOF) has revised elements of its expanded Sales and Service Tax (SST) regime, following consultations with the public, industry players, and parliamentarians.

In a statement on Friday, MOF said the updated measures, aimed at easing cost-of-living pressures and supporting small businesses, will come into force on 1 July 2025.

Announcing the revisions on Friday, Prime Minister Datuk Seri Anwar Ibrahim said the adjustments reflect the MADANI Government’s principle of progressive taxation and commitment to economic fairness.

“In response to public feedback, we have reviewed the scope of SST expansion to protect basic consumption needs and small businesses,” Anwar, who is also Finance Minister said.

Tax relief for imported fruits

In a key change, selected imported fruits – namely apples, oranges, mandarin oranges, and dates – will now be exempted from Sales Tax.

The ministry affirmed that other essential goods including rice, vegetables, chicken, beef, eggs, and local fish such as selar, tongkol, cencaru and sardines, will also remain untaxed under the SST structure.

Service Tax threshold raised to ease SME burden

To cushion the impact on small businesses, the ministry announced that the registration threshold for Service Tax will be raised from RM500,000 to RM1 million in annual sales for leasing, rental and financial services. Only companies exceeding the RM1 million threshold will be subject to the 8 per cent tax.

“This adjustment is intended to protect micro, small and medium enterprises (MSMEs), who would otherwise be disproportionately affected,” the ministry added.

Beauty services spared from tax net

In another notable revision, proposed Service Tax on beauty-related services – including facials, haircuts, manicures and pedicures – will no longer proceed. The decision comes in direct response to widespread public sentiment.

“After carefully considering public opinion, we have decided not to proceed with taxing beauty services,” said the Prime Minister.

The ministry has encouraged the public and businesses to consult official resources for further clarification, including legislation, guidance documents and FAQs provided through the Ministry of Finance and Royal Malaysian Customs Department communication platforms.

Enquiries may be directed to the SST Call Centre via hotline 1-300-888-500 or through additional direct contact lines listed in the official release. - June 27, 2025

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