KUALA LUMPUR — The Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) has urged the government to reduce the expanded sales and service tax (SST) rate to four per cent for the first two years of implementation (2026–2027) to ease the tax burden on businesses and consumers.
It also called for the implementation of the revised SST to be postponed from the scheduled date of July 1 2025 to January 2026, to allow businesses more time to prepare.
While “cautiously welcoming” the government’s announcement on Thursday to review the scope of the SST, the ACCCIM said the move could help mitigate the financial impact on businesses and households.
In a statement today, the chamber noted that the expanded SST will cover additional services—such as wellness centres, financial services, and healthcare—as well as introduce tax on three new service categories: rental or leasing, construction works, and education.
“Adequate preparation is crucial to ensure smooth implementation and better compliance,” it said, expressing concern over compounding cost pressures in an already challenging global and domestic economic climate.
These challenges are further intensified by uncertainties in global trade policy and ongoing conflicts in the Middle East.
“The effects of rising costs, which have already been felt in 2025, are expected to persist or continue shaping the business and economic environment into 2026,” it added.
The ACCCIM also urged the government to raise the service tax registration threshold for leasing or rental and construction services to RM3 million from the current RM1 million.
In addition, it recommended increasing the exemption threshold for SME tenants to RM2 million in annual sales, up from the RM1 million threshold announced by the government on Thursday.
“We also propose a longer exemption period of 36 months for both reviewable and non-reviewable contracts, covering all project types due to the varying nature and timelines of such projects,” the statement said.
The ACCCIM added that it will continue engaging with its members and industry stakeholders to provide constructive feedback and recommendations to the government, aimed at easing the impact of the SST expansion on businesses and consumers. — June 28, 2025