KUALA LUMPUR: Water and electricity bills may be exempted from the planned sales and service tax (SST) hike.
The Domestic Trade and Cost of Living Ministry has undertaken a study on the possible effects of such a hike on all affected goods and services and the results will be presented to the National Action Council on Cost of Living on March 20.
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“The special paper on the study was presented during an internal ministry meeting around two weeks ago,” Minister Datuk Armizan Mohd Ali told Datuk Seri Dr Wee Ka Siong (BN-Ayer Hitam) at the Dewan Rakyat.
Dr Wee had questioned the possible negative impacts of the SST hike.
“If we can give telecommunications, parking and F&B exemptions from the hike, why can’t we give it to core essentials like water and electricity?
“Electricity tariffs have increased and water rates have also gone up by 21%. Come March, the public’s burden will only get worse with the tax hike,” he said.
From March 1, the SST rate for most services, including overseas-based digital services, will increase from 6% to 8%.
Currently, only food and beverage, telecommunications and vehicle parking services have been given exemption from the tax hike. Previously untaxed services like karaoke outlets, delivery services, brokerage and underwriting services will now be subject to the 8% SST.
The increase in tax rates and taxable items was previously announced as part of taxation reforms in Budget 2024 last year.
The move is part of the government’s efforts to boost the financial resilience of the country while reducing its budget deficit. It is also aimed at broadening the revenue base of the country but has been met with mixed reactions from various stakeholders.
