PETALING JAYA: The Malaysian Retail Chain Association (MRCA) has called on the government to postpone the implementation of the 8% sales and service tax (SST) on rental and leasing services, due to come into effect on July 1.
MRCA said while it recognises the government's intention to broaden the national tax base and enhance fiscal sustainability through targeted measures, extending SST to commercial rental presents considerable challenges to retailers operating physical outlets.
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"The additional cost burden comes at a time when many businesses are already contending with rising operational expenses, including minimum wage adjustments, stamping of employee contracts and heightened regulatory compliance," it said in a statement on Friday (June 20).
"In the context of the supply chain from manufacturers and distributors to retailers, the increased cost of doing business is expected to translate into higher end prices for consumers," it added.
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MRCA said retailers across the board may find it increasingly difficult to absorb these additional expenses, particularly with a weaker consumer sentiment amid expectations of gradual government subsidy removal.
MRCA said it will continue to engage with the Finance Ministry and relevant agencies to ensure that policy implementation remains balanced, transparent and conducive to the sustainable growth of the retail sector.
