Malaysia will revise its sales tax rate and expand the scope of its services tax starting July 1, the finance ministry said Monday.
The government aims to boost revenue and strengthen its fiscal position through these changes. A sales tax of 5% to 10% will apply to non-essential and luxury goods such as king crab, salmon, imported fruits, racing bicycles, and antique artworks.
The services tax will cover more sectors, including property rentals, construction, financial services, private healthcare, education, and beauty services. The ministry said the move will increase revenue and broaden the tax base to improve social safety nets without burdening most people.
Prime Minister Anwar Ibrahim announced last October that the sales and services tax would gradually expand, but the rollout was delayed from May due to business concerns. The Federation of Malaysian Manufacturers had urged the government in April to delay the tax expansion, citing tariff and global trade uncertainties that could raise operating costs.
The finance ministry said some exemptions will apply to avoid double taxation and protect Malaysian nationals from taxes on certain essential services. Companies will not face penalties for non-compliance with the new tax rules until December 31.
The ministry said the changes support Malaysia’s efforts to improve its fiscal health amid economic challenges.
