Cabinet willing to discuss exempting utilities from SST increase, says DPM Fadillah

KUALA LUMPUR: The Cabinet is prepared to discuss the possibility of exempting water and electricity from the planned sales and service tax (SST) hike, says Datuk Seri Fadillah Yusof.

"Definitely, for some areas, the government will have a look at it," the Deputy Prime Minister told a press conference here on Wednesday (Feb 28).

ALSO READ: Demand for utility exemption from SST grows

However, Fadillah, who is also Energy Transition and Water Transformation Minister, said there was no decision yet.

"Some of the areas we are looking at, for example, include who is entitled to an exemption.

"Because otherwise (the revenue collected) goes back to the people," he explained.

Asked if the matter will be raised in the next Cabinet meeting, he said it was not on the agenda yet but the Finance Ministry was looking at the overall situation.

From Friday (March 1), the SST rate for most services, including overseas-based digital services, will see an increase from 6% to 8%.

Services that were untaxed previously, such as karaoke outlets, delivery, brokerage and underwriting services, will also be subjected to the new rate of 8%.

ALSO READ: Ministry study may spare electricity, water bills from SST hike

On Tuesday (Feb 27), MCA president Datuk Seri Dr Wee Ka Siong reiterated his call for water and electricity charges to be exempted from the planned hike.

"Although three sectors – food and beverage, parking and telecommunications – have been exempted, aren't water and electricity basic needs that should also be exempted?" the Ayer Hitam MP asked in a Facebook video.

ALSO READ: Dr Wee calls for water, electricity to be exempted from SST hike

The same day, Domestic Trade and Cost of Living Minister Datuk Armizan Mohd Ali told the Dewan Rakyat that the ministry had conducted a study on the implications of the SST increase.

He said the findings would be presented to the National Action Council on Cost of Living (Naccol) on March 20 and said it was possible that utility charges could be exempted.

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