Eight per cent SST effective today

01 Mar 2024 10:03am
Photo for illustration purposes only.
Photo for illustration purposes only.

KUALA LUMPUR - Starting today, the sales and service tax (SST) rate will go up from six per cent to eight per cent.

However, this new rate would not be applicable to services related to food and beverages, telecommunications and parking.

The increase in the new SST rate to eight per cent was announced during the Budget 2024 tabling in October, last year.

This change was in line with the government's effort to strengthen the country's financial resilience while reducing its budget deficit.

This will help the government in continuing to generate revenue for the country.

Meanwhile, the decision to exempt water and electricity bills from this increase has not been finalised yet.

The rate hike was expected to boost government's revenue.

Last year, Malaysia collected just under RM30 billion.

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This placed Malaysia among the countries with the lowest tax revenue in Southeast Asia, with the tax-to-gross domestic product (GDP) ratio at 11.8 per cent.

The Finance Ministry has estimated an additional RM3 billion in revenue next year with the implementation of the eight per cent SST rate. - AWANI