Exempt electricity from SST hike, urges Dr Wee

KUALA LUMPUR: Electricity bills should be exempted from the sales and service tax (SST) hike, says Datuk Seri Dr Wee Ka Siong.

The MCA president said the exemption should be across all sectors and without any threshold.

This comes after the Finance Ministry announced that an 8% SST charge will be imposed for electricity usage of more than 600kWH per month, effective March 1, 2024.

Water has, however, been exempted from the increase to 8%.

“My plea is to not increase the SST. While the lower income group may not be affected directly, they will experience the spillover whenever tax rates go up,” he told a press conference at the Parliament media centre on Thursday (Feb 29).

He said electricity rates were also raised last year, with the impending SST increase for electricity usage of more than 600kWH per month beginning March 1 being another hike.

In July, it was also announced that those who used more than 1,5000 kWh or bills that exceeded RM708 a month, would be subject to a surcharge of 10 sen/kWh.

Dr Wee said businesses would be further burdened by the 2% SST increase, adding that it could ultimately see increasing prices of goods to retain profit margins.

“In the long run, rent and production cost increases are eventually passed down for the consumers to bear,” he said.

He added that electricity should be fully exempted from the tax hike, as it was also an essential just like water.

"At least exempt the tax hike for electricity across the board. Retain it at 6% so we don't see another wave of price increases," he added.