THE expansion of the Sales and Service Tax (SST) on fee-based financial services is unlikely to face much resistance as the sector has proven resilient and can absorb the additional taxes, says an economist.
Dr Yeah Kim Leng, director of the economic studies programme at Jeffrey Cheah Institute on South-East Asia in Sunway University, said this is because many firms in the financial services industry have been earning good profits.
“In lieu of the broad-based Goods and Services Tax (GST), implementing specific taxes and widening the scope is necessary for increasing government revenue so that larger spending is possible while lowering the fiscal deficit at the same time,” he added.
In his Budget 2025 presentation, Prime Minister Datuk Seri Anwar Ibrahim said sales taxes will be applied to non-essential items, including premium imported goods like salmon and avocados.
Fruit seller Amin As-Syiq said if prices rise for premium fruits like avocados and pomegranates, customers might buy less.
“People don’t usually purchase these fruits in bulk, so an increase in their prices would be quite noticeable,” he said.
