KUALA LUMPUR – The Domestic Trade and Consumer Affairs Ministry will be monitoring the implementation of the increased service tax (SST) to ensure that sectors unaffected by the hike do not attempt to unjustly benefit from the situation.
Communications Minister Fahmi Fadzil said the initiative, dubbed Ops Kesan 2024, will allow the public to report to the Domestic Trade and Consumer Affairs Ministry if certain shops are found to have unreasonably increased their prices.
“When the government announced that the SST increase will not involve food and beverage (sectors), many were worried about enforcement (of the tax),” the minister said on his social media accounts today.
“Ops Kesan will monitor sectors not part of the service tax hike to make sure that no one takes advantage (of the tax hike).”
The minister also shared a poster stating that the Domestic Trade and Cost of Living Ministry had begun monitoring the implementation of the increased tax since yesterday, when it came into effect.
Previously, the Finance Ministry said that the government does not anticipate the higher tax to engender sharp price increases that would lead to an economic shock, as the increase affects selected taxable services.
The service tax increase will also generate an estimated RM3 billion more in revenue for the country, to be used for social assistance schemes and improving public infrastructure, the ministry said.
Besides food and beverage, telecommunications, parking lots, and logistical services, including the delivery of e-commerce items, have also been exempted from the 8% SST, which was increased by two percentage points from its previous rate.
At the same time, the exemption also applies to bills for treated water supply.
However, households that use less than 600kWh of electricity a month, or whose monthly bill is less than RM220, will also not be affected by the higher tax, while credit and charge card services remain at RM25 per annum.
Meanwhile, other consumer activities affected by the tax increase are those deemed non-essential, with the most common ones being hotel stays, as well as entertainment and wellness centres.
The 8% service tax, announced in the tabling of Budget 2024, was gazetted on February 23 under the Service Tax (Amendment) Regulations 2024. – March 2, 2024