Since 1 July 2025, Malaysia’s Sales & Service Tax (SST) has expanded “fiercely”!

I attended a Wolters Kluwer webinar last week with top tax experts from KPMG, PwC, EY, and RDS Law.

The message was clear : minor changes in tax law can bring major consequences to businesses.

What Changed?

Sales Tax : 486 tariff lines moved from exempt to 5%. Everyday items like yogurt, butter, imported fruits, machinery and even racing bicycles now taxed 5–10%.

Service Tax : New areas added from rental & leasing (8%), construction (6%), financial services (fees & commissions), plus private healthcare and premium education. Even leasing a photocopier or coffee machine attracts service tax now.

Why Painful?

No input tax credit : direct cost of doing business.
Thin margins (e.g. construction 2–3%) now under pressure.
Contract confusion (stamping, mixed developments).
Tenants vs landlords disputes on who absorbs 8%.

What to Do?

Review contracts & revenue streams.
Check exemptions (MSME, B2B, group relief).
Update pricing strategies carefully.
Monitor Customs’ latest guidelines.

SST expansion is not just compliance. It changes how businesses price, plan, and compete. Don’t wait until Customs knocks on your door.

Read the full content in our blog
https://www.ktp.com.my/blog/what-is-the-scope-expansion-of-sst-in-malaysia-2025/20aug2025