KUALA LUMPUR: Imposing the expanded Sales and Service Tax (SST) on stationery and paper products will burden students, parents and educators, undermining the national education agenda, says MCA.
Its Economic and SME Affairs Committee chairman Datuk Lawrence Low (pic, below) said taxing essential educational supplies is akin to charging teachers and students from low-income families.
“The focus of taxation should be on non-essential and luxury items, not basic educational tools.
“Taxing these necessities is a blow to universal education and contradicts the government’s commitment to empowering society through learning,” he told a press conference yesterday.
Low said the new SST charges are expected to push the prices of paper and stationery up by more than 10%.
This would likely lead to increased school fees as educators and tuition centres pass down operational expenses, he added.
“The B40 and M40 families will be hit the hardest as they now face higher costs preparing for the new school term.
“If even a pencil is taxed, that’s not fiscal progress – it’s social regression,” he said.
Low also highlighted the impact on the micro-, small- and medium-sized enterprises (MSMEs) involved in Malaysia’s stationery trade, from wholesalers and retailers to bookshops and independent stationery stores.
“Most of these businesses are hit with SST at multiple levels, which they cannot pass on entirely to consumers. Some customers are holding back from buying due to higher prices.
Businesses are forced to absorb the cost or risk closure. This is not fair taxation – it is pushing MSMEs to the brink,” he said.
Low noted that the lack of clarity in SST’s scope and the inability to offset input taxes could open the door to tax evasion while penalising law-abiding businesses.
“They are taxed on incoming stock and again when selling it, with no system for tax deduction, unlike the GST model. This leads to cascading costs and ultimately higher prices for the end consumer,” he added.
He urged the government to exempt frequently used stationery from SST and called for a complaints and advisory channel to help businesses navigate the grey areas of the SST regime.
Low also called on the Finance Ministry to review the SST’s impact on small industries and consider interim tax relief or transition assistance.
Ultimately, he said Malaysia should aim for a more transparent, fair and efficient tax structure – including the possibility of reintroducing a refined version of the Goods and Services Tax (GST 2.0).
The expanded SST, which took effect this month, now covers more goods and services with tax rates ranging from 5% to 10%.
The Federation of Stationers and Booksellers Association of Malaysia president, Tan Chong Ong, said many businesses have been notified by their suppliers of a potential price hike, particularly in paper products.
