PETALING JAYA: The government will not proceed with the proposed inclusion of beauty services under the expanded Sales and Service Tax (SST), following public concern and feedback from industry players.
The Finance Ministry said the decision was made by Prime Minister Datuk Seri Anwar Ibrahim, who also holds the finance portfolio, after taking into account widespread sentiment ahead of the SST expansion taking effect on July 1.
This means services such as manicures, pedicures, facials, and haircuts will remain exempt under the revised tax regime.
The exemption is one of several adjustments announced by the Finance Ministry as part of efforts to fine-tune the tax structure and cushion its impact on the public and small businesses.
“The Madani government remains committed to ensuring that the SST revision is progressive and mitigates the impact on basic consumption items by the rakyat and the impact on small businesses,” the ministry said in a statement Friday (June 27).
The revisions follow widespread feedback from both the public and industry groups. Hairdressers and beauty salon operators had voiced concern that taxing services like haircuts and facials would unfairly burden small businesses and lower-income consumers, with objections raised earlier this month.
In a broader move to manage cost-of-living pressures, the government will also exempt selected imported fruits — apples, oranges, mandarin oranges and dates — from the Sales Tax.
The ministry reaffirmed that essential food items such as rice, chicken, beef, vegetables, eggs, and various local fish — including selar (yellowtail scad), tongkol (longtail tuna) and cencaru (torpedo scad) — whether fresh, chilled or frozen, remain exempt from the tax. These fish are staple protein sources for many households due to their affordability and accessibility.
To reduce the burden on small businesses, the annual sales threshold for mandatory Service Tax registration has been raised from RM500,000 to RM1mil for leasing, rental, and financial services.
This means only companies generating over RM1mil in yearly sales from such services will be required to charge the 8% tax. For financial services, the tax applies specifically to fee- or commission-based activities.
The ministry also reminded the public and stakeholders to refer only to verified information on the SST rollout, including official announcements, guidelines, FAQs and subsidiary legislation available through the Finance Ministry and Royal Malaysian Customs Department websites.
Further enquiries can be directed to the Customs Department SST Call Centre at 1-300-888-500 or through the dedicated hotline numbers.
The expanded SST will come into effect on July 1, 2025.
