Kuala Lumpur: The Ministry of Finance has announced revisions to the Sales Tax rates and an expansion in the scope of the Service Tax, set to take effect on July 1, 2025. This move aims to enhance the country’s fiscal stability by increasing revenue and broadening the tax base.

According to BERNAMA News Agency, the revised Sales Tax framework ensures that essential daily goods will continue to be taxed at zero percent. Items such as chicken, beef, rice, and cooking oil, along with key construction materials and agricultural inputs, will not see any increase in taxation. However, selected non-essential goods like king crab and imported fruits will now be taxed at five percent, while premium goods such as racing bicycles will face a ten percent tax.

The expansion of the Service Tax will include six new service categories, including leasing, construction, and private healthcare. An eight percent Service Tax will apply to leasing services with certain exemptions, while construction services will incur a six percent tax with measures to ease compliance. Financial services will also face an eight percent tax with exemptions for basic services.

Private healthcare will see a six percent Service Tax for non-citizens, with exemptions for Malaysians. Education services will incur a six percent tax on high-value institutions, primarily affecting non-citizens. Beauty services will have an eight percent tax for providers exceeding a specific threshold.

The Ministry has outlined that businesses will have time to assess their tax obligations with guidance from the Royal Malaysian Customs Department. Industry players are encouraged to review their operations to determine their taxable status and seek advice on compliance.