Malaysia-Updates to the Expanded Sales Tax and Service Tax Effective 1 July 2025
SST stands for Sales and Service Tax, a consumption tax implemented in Malaysia since 2018 (replacing GST). It is split into:
- Sales Tax – Charged on certain goods at the manufacturer or import level.
- Service Tax – Charged on specified taxable services provided in Malaysia.
On 9 June 2025, the Ministry of Finance (MOF) announced that the Government will implement an expansion of Sales and Service Tax (SST) scope effective 1 July 2025, in line with measures outlined under Budget 2025. This measure aims to strengthen the country’s fiscal position by increasing revenue and broadening the tax base without adding undue burden on the majority of Malaysians.
Some of the highlights of the new SST rates are tabled below:
| Category | Previous | From 1 July 2025 |
| Essential goods | 0% | 0% (unchanged) |
| Imported fruits (e.g. apples, mandarin oranges, dates) | Taxable | Exempted |
| Premium goods (e.g. salmon, oils) | 0% | 5% Sales Tax |
| Luxury goods (e.g. antique art) | 0% / 5% | 10% Sales Tax |
| Construction services | Not taxed | 6% Service Tax (RM1.5 million threshold) |
| Private healthcare services (non-citizens) | Not taxed | 6% Service Tax (RM1.5 million threshold) |
| Leasing/rental services | 8% (RM500k threshold) | 8% (new – RM1 million threshold) |
| Financial services | 8% (RM500k threshold) | 8% (new – RM1 million threshold) |
| High-end education (>RM60k/year) | Not taxed | 6% Service Tax |
| Beauty services (facial, haircuts) | Proposed | Now excluded |
In addition, the following industries or services are newly taxed under SST on a rate between 5% to 10%:
- Construction & renovation
- Private healthcare for non-citizens
- Financial services (commissions, fees)
- Leasing or rental of equipment/offices
- High-end private education
- Some outsourced services (e.g. recruitment, training)
When to register for SST?
Business are required to register for SST if the business provides taxable goods or services AND meets the threshold; RM500,000 or RM1 million. The Government allows a grace period until 31 December 2025 for businesses to complete the registration for SST.
Disclaimer
Our office is not a licensed tax agent. The information provided in this document is for general reference purposes only and does not constitute legal, tax, or professional advice. You are advised to consult with qualified legal or tax professionals for specific guidance related to your business.
For more information, you can also visit https://mysst.customs.gov.my/ for the latest updates and official guidelines.