THE government has rolled out a series of targeted support measures to help ease the impact of the newly expanded Sales and Service Tax (SST), which takes effect today and is expected to raise the cost of a broad range of goods and services.
The revised tax framework, which includes a broader scope of taxable services and increased rates for non-essential items, is designed to strengthen national revenue. At the same time, officials have assured that financial assistance is in place to help households – particularly those in the B40 and M40 income brackets – cope with higher living costs.
According to economist Professor Dr Barjoyai Bardai, various schemes are already available but underutilised due to low pulic awareness.
"For M40 households earning below RM100,000 a year, the support measures include the mySalam health takaful, which offers critical illness coverage and hospital income aid," The Star reported him saying.
Other key initiatives include the Skim Jaminan Kredit Perumahan (SJKP), which guarantees housing loans of up to RM500,000 for M40 and self-employed individuals, and the Kad Pekerja Madani, a discount card that offers unionised workers savings of up to 30 per cent on essential goods, travel and services.
Barjoyai stressed the importance of shifting public perception to focus on the help that is available.
"The problem with Malaysian consumers is their perception. They’re quick to assume the worst, often thinking: ‘What other burdens are going to be placed on my shoulders today?’”
"Yes, the government can always improve by, say, increasing the aid amount. But these programmes exist, and people should take advantage of them."
He recommended that the government increase awareness by leveraging popular digital platforms such as WhatsApp.
"That’s where people are most active, and a simple message highlighting the programmes could catch their attention," he added.
The Ministry of Finance expects the expanded SST to bring in an additional RM5 billion in revenue in 2025 and RM10 billion in 2026.
Treasury secretary-general Datuk Johan Mahmood Merican said the government has taken a “progressive approach” in revising the tax base.
"The government has taken a progressive approach by expanding the tax base, with the tax burden being skewed towards those who can afford it," he said during a recent visit to the Customs Department.
"This means that when determining the scope and those who are subject to the Service Tax, as well as the Sales Tax approach, efforts have been made to ensure it is implemented in a targeted manner."
Finance Minister II Amir Hamzah Azizan previously stated that the revised SST is expected to generate RM51.7 billion in revenue next year, an increase from the original estimate of RM46.7 billion.
Under the new structure, essential goods remain exempt from higher tax rates, while discretionary and non-essential items will be taxed at five or 10 per cent.
The Service Tax now also applies to a wider range of industries, including leasing, construction, financial services, private healthcare, education, and beauty services. - July 1, 2025
