BUTTERWORTH: Barbers and hair salon operators here are in the dark over the expanded Sales and Service Tax (SST), with some raising concerns over compliance and potential cost implications upon its implementation.
Barbershop operator Rashidan Wan Hamid, 56, only learned about the expanded SST through news reports and conversations with industry peers.
He said business operating costs would be affected if barbershops were subject to the expanded tax.
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“I foresee an impact on both my services and expenses. If the service tax is imposed, we will have to reassess everything, from pricing to profit margins.
“Naturally, business will slow down if prices go up because customers may cut back on grooming services,” he said, adding that any form of taxation will inevitably affect small traders.
Rashidan urged the government to review the implementation and consider postponing it until the economy improves.
Barbershop owner Muhammad Zulfaqaruddin Mohd Shaiful, 22, said he was unsure how the expanded SST would affect the industry. He said there was a lack of clarity on how the tax would be applied and whether barbershops like his would fall under its scope.
“If the tax is imposed, it will impact my operations and service pricing,” he said, adding that rising costs could affect customer retention.
As a young entrepreneur still building his customer base, Muhammad Zulfaqaruddin said affordability is key to retaining clients in a competitive market.
He added that barbershops often operate on thin profit margins, and absorbing the additional cost could make it harder for smaller operators like him to stay competitive.
For now, he will run his business as usual and follow any instructions from the government regarding the SST.
Female Muslim spa and hair salon operator Aufa Insyirah Mohamad Halimi, 25, said her business has yet to receive any instructions regarding the imposition of SST.
“At the moment, we are operating as usual. I am uncertain whether my business falls under the expanded tax category,” she said.
However, Aufa Insyirah said that if her business is required to comply, service prices would likely change based on the total value of treatments customers receive.
“Service prices won’t be increased unless there is a rise in material costs or a revision of the minimum wage,” she added.
The reviewed and expanded SST rates, as announced in Budget 2025, will come into effect on July 1.
The Finance Ministry said in a statement on June 9 that the measure is to strengthen the country’s fiscal position by increasing revenue and broadening the tax base.
The existing tax scope will be expanded to cover six types of services: rental or leasing, construction work, financial, private healthcare, education and beauty.
