Starting July: Malaysia Expands SST Coverage to Include Beauty Services with Annual Sales Over RM500,000

(Putrajaya, 9th June) – Beginning July 1st, the Malaysian government will conditionally expand the scope and rate of the Sales and Services Tax (SST), while ensuring that basic necessities remain unaffected.

One major addition is beauty services with annual sales of RM500,000 or more, which will be subjected to an 8% service tax. These services include facial treatments, manicures, hair care, tattoo removal, makeup and cosmetics, slimming and body shaping services, and spa treatments using herbs, milk, and flowers.

Other service sectors that will see conditional tax expansion include financial services, leasing, construction, healthcare, and education. The increase in sales tax coverage is expected to contribute an additional RM5 billion to government revenue this year.

Second Finance Minister, Datuk Seri Amir Hamzah, stated that the newly taxed items will not include basic necessities, but will target non-essential goods such as imported premium salmon and avocados.

Basic Necessities Remain at 0% SST

He clarified during a press briefing that the 0% SST will continue to apply to essential goods, including:

• Unprocessed meat and fish

• Locally produced fruits and vegetables

• White rice, barley, and wheat

• Processed foods like flour, canned sardines, salt, sugar, bread, noodles, milk, Milo, Vico cocoa powder, and cooking oil

Other items exempt from SST include:

• Medicines and medical devices

• Books, magazines, and newspapers

• Livestock and pet food

• Basic construction materials (cement, sand, stones)

• Fertilizers, pesticides, agricultural machinery, and harvest tools

New Products Taxed at 5% SST

Products that will be taxed at 5% include:

• King crab, salmon, cod

• Truffles, imported strawberries

• Essential oils, silk, and industrial machinery

Products Remaining at 5% SST

• Abalone, lobsters

• Quinoa, cheese, jams

• Mobile phones

Products Taxed at 10% SST

• Caviar, shark fin

• Alcohol, cigarettes, cigars

• Leather goods

New additions to the 10% SST list include:

• Tungsten scrap

• Racing bicycles

• Hand-painted antiques
  
  

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