Our services are a necessity and not a luxury, claim industry players
PETALING JAYA: Hairdressing and salon industry players have appealed to the government to reconsider imposing the expanded 8% Sales and Service Tax (SST) on their services, which they deem a necessity and not a luxury.
United Asian Hairdressers Association (UAHA) president Dr Michael Poh said hairdressing remains a basic need and personal hygiene-related service for many, including those seeking to treat scalp problems.
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“Taxing hairdressing as though it is a luxury service is not only inappropriate, but also unfairly affects both operators and consumers.
“We kindly urge the government to reconsider and exempt hairdressing services to protect this fragile yet essential industry, and prevent further financial strain on micro-entrepreneurs as well as the people they serve.
“Placing it under the same tax category as other luxury or high-margin services does not reflect the economic realities faced by most in our sector,” he told The Star.
Poh said a letter by UAHA and other industry players was sent to Prime Minister Datuk Seri Anwar Ibrahim and the Finance Ministry on June 12 to express their concern regarding the imposition of the 8% tax.
The stakeholders include the Malaysian Hairdressing Association, Bumiputera Hairdressers Association, Malaysian Indian Hairstylist Empowerment Association, Persatuan Kemahiran Wanita Selangor and Branding Association of Malaysia.
The Federation of Malaysian Business Associations has also come up with a petition form for its stakeholders appealing to Finance Minister II Datuk Seri Amir Hamzah Azizan for the postponement and reconsideration of the SST expansion.
According to the Finance Ministry, effective July 1, an 8% SST will be applied to all hairdressing services, which are deemed non-essential services, for businesses with an annual value exceeding RM500,000.
This includes services provided by salons and hairdressers, but not the sale of hair products.
Poh said that given the current situation for financially-strained businesses operating in malls with high rentals, periodic renovations and overhead costs, their average turnover ranges between RM650,000 and RM700,000, which is barely enough to break even.
“In the long run, those operating in shopping malls will have to close down because they are not friendly to the beauty industry. This is an important thing that must be considered.
“If they (the government) want to tax, then use the Goods and Service Tax (GST) of 3% or 6%, which is easier for us, or reduce (the SST) from 8% to 3% so that we can ensure our survival,” he said.
Syiling Unisex Hair Salon owner Mogana Chinnathamby said smaller local barbers or salon owners with revenues below the threshold can continue without SST, but many salons in malls or premium areas typically exceed that limit and have started adjusting prices.
“As a responsible salon operator, we fully support tax transparency and compliance.
“If our revenue meets the threshold, we will implement the SST accordingly and ensure that it is clearly communicated to our customers with no hidden or unexpected charges.
“But the majority of customers may reduce frequency from monthly to every two months to cope with the rising costs, and I believe there will be some initial pushback too from customers,” said Mogana, who is also Kuala Lumpur and Selangor Indian Chamber of Commerce and Industry Honorary secretary-general.
She hopes the authorities will continue engaging with industry players to review classifications that affect essential services like haircuts, especially in the interest of affordability for the public.
Malaysian Indian Hair Dressing Saloon Owners Association honorary secretary-general Jeyakumar Manokaran said they will be meeting with their members to discuss the implementation of the SST.
He acknowledged that the 8% SST will eventually be passed on to consumers.
“But we have to bear in mind that they are already being burdened by a lot of other increases in cost of living.
“So, we have to see whether they can eventually afford it.
“The other matter is that the Indian barbers and salons are mostly frequented by the B40 group,” he noted.
As such, he hopes the government will reconsider imposing the SST expansion.
