KLSICCI Urges Targeted, Phased SST Expansion To Safeguard MSME, B40 Groups

KUALA LUMPUR, June 14 (Bernama) -- The Kuala Lumpur and Selangor Indian Chamber of Commerce and Industry (KLSICCI) has urged the government to adopt a strategic, inclusive and phased approach in expanding the Sales and Service Tax (SST) to avoid unintended burdens on vulnerable groups and micro, small and medium enterprises (MSMEs).

Its president, Nivaas Ragavan, said that while KLSICCI acknowledges the government’s fiscal intent to strengthen national revenue and ensure long-term sustainability, the expansion of the SST must be “targeted, equitable, and progressive”.

“Rather than broadly taxing essential goods or services used daily by the rakyat, especially the B40 and lower M40 communities, we recommend focusing the SST expansion on luxury items, non-essential imports and high-end discretionary services,” he said in a statement today.

Nivaas said such a move would ensure a fairer tax structure, allowing those with greater means to bear a greater share of the tax burden, while protecting the cost of living for the average Malaysian family.

“KLSICCI supports the government’s vision for a more robust tax base. However, we call for a strategic, consultative, and fair approach, one that protects the interests of the rakyat and the sustainability of the business ecosystem, particularly our MSMEs that form the backbone of the economy,” he said.

The government will implement a revision of the Sales Tax rates and an expansion of the Service Tax scope effective July 1, 2025, to strengthen the country’s fiscal position by increasing revenue and broadening the tax base.

Finance Minister II Datuk Seri Amir Hamzah Azizan said these measures are aimed at improving the quality of the social safety net without burdening the majority of Malaysians.

The Sales Tax rate will remain unchanged for essential goods consumed by the people, while a rate of either five or 10 per cent will be imposed on non-essential or discretionary goods.

The scope of the Service Tax will be extended to include new services such as rental and leasing, construction, finance, private healthcare, education, and beauty services.

This expansion is accompanied by selective exemptions to avoid double taxation and ensure that certain essential services for Malaysian citizens are not taxed.

-- BERNAMA