SST to affect TCM costs

Old-school remedies: Staff at a Chinese traditional medicine shop sorting out herbs and more. — LOW LAY PHON/The Star

PETALING JAYA: Traditional Chinese Medicine (TCM) outlets are expecting to see a significant jump in prices when the new 8% sales and service tax (SST) comes into effect in March.

Malaysian Chinese Medical Association president Dr Heng Aik Teng said the announcement of the SST hike came as a shock to many practitioners, who were not aware that their business is parked under the taxable “Category C”, which also includes premises such as massage parlours, health and wellness centres as well as nightclubs and dance halls.

He said unlike wellness centres, to which customers go for leisure and relaxation, TCM provides treatment.

“I believe there is a misunderstanding. TCM gives treatment based on the illnesses of patients and we also give medicine prescriptions accordingly. So, this industry is very different from the wellness sector,” he said when contacted yesterday.

The 6% SST was implemented in 2018 following the abolishment of the goods and services tax, and the government increased the tax to 8% next year as announced in Budget 2024 two months ago.

With this in place, Heng said customers would have to pay higher prices for services such as acupuncture, cupping therapy, tui na and gua sha.

He added that the industry is expecting to see a drop in business by at least 20%.

In a letter dated Dec 14 sent to eight TCM associations, the Health Ministry said many operators of businesses which offer traditional and complementary medicine treatments and with a threshold value of RM500,000, were not aware that they needed to pay the SST.

Explaining further, the ministry said the business comes under the taxable health and wellness category. It also ordered practitioners to clear their SST arrears dating from 2018 by May next year.

The Federation of Chinese Physicians and Acupuncturists Association chairman Prof Dr Ng Po Kok expressed concern over the matter.

“The Health Ministry is asking the businesses to pay outstanding taxes.

“But how? They didn’t charge their customers the 6% SST so how do they pay the taxes?

“We are not talking about arrears of one year, but five years. Can you imagine how much money is involved?

“On top of that, we all have to pay 8% tax next year,” he added.

The other six TCM bodies, named in the Health Ministry’s letter are the Federation of Chinese Physicians and Medicine Dealers Association of Malaysia, Gabungan Pertubuhan Pengamal Perubatan Tradisional Melayu Malaysia, Pertubuhan Perubatan Tradisional India Malaysia, Malaysian Homeopathic Medical Council, Federation of Complementary and Natural Medical Associations Malaysia and Persatuan Perubatan, Pengubatan dan Kebajikan Islam Malaysia.

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