KOTA KINABALU: The Federal Government has been urged to postpone the planned expansion of the sales and services tax (SST) so as not to worsen the situation of rising living costs.
National Consumer Foundation Malaysia Sabah chapter president David Chan said that in a climate of persistent economic strain, the cost of daily necessities like food and essential services continues to climb.
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“Any expansion of SST will inevitably raise business operating expenses, with these additional costs passed on to consumers," he said in a statement on Friday (June 13).
"This will intensify the financial pressures already facing households, particularly when wages remain stagnant and job insecurity is growing."
Chan added that the recent announcement by PETRONAS to cut 5,000 jobs also reflects the severity of the current landscape.
“Global market instability, driven by ongoing trade tensions and higher import tariffs, especially from the United States, is already impacting Malaysia’s economy, from manufacturing to logistics and beyond.
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“At a time when many Malaysians are struggling with inflation and diminished purchasing power, we call on the government to defer any SST expansion until economic conditions improve and global uncertainties stabilise,” he said.
Instead, he suggested that the government prioritise domestic economic recovery, safeguard employment, and ensure access to affordable goods and services.
“Any future tax policy changes must be informed by comprehensive impact assessments and accompanied by targeted mitigation strategies to shield low- and middle-income groups,” he said.
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He added that the NGO also urged policymakers not to impose additional burdens on the rakyat in the name of fiscal reform.
“Recovery efforts must be people-centric, and taxation policies must reflect the lived realities of consumers and businesses alike,” he said.
Under the expanded SST set to take effect on July 1, sales tax is levied on goods manufactured locally and on imported goods.
Agricultural produce grown in Malaysia is not subject to sales tax.
