PETALING JAYA: The proposed hybrid sales and service tax (SST) and goods and services tax (GST) must simplify compliance and ease administration for small and medium enterprises (SME), says the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM).
It said the drafting of the hybrid model should also include a review of Malaysia’s Service Tax Regulations 2018 covering logistics services.
"Ultimately, the hybrid SST-GST framework must prioritise simplified administrative procedures and crystal-clear input tax credit rules to prevent compounding costs for businesses," it said in a statement on Friday (Aug 28).
This was part of ACCCIM’s proposals ahead of Budget 2027 being tabled on Oct 9.
It also urged for a comprehensive review of the Stamp Act 1949, proposing a repeal of the Act and drafting a new, relevant law to reflect the times.
The new law, it said, should exempt all instruments other than transfers of property, transfers of shares, stocks or marketable securities, and loan agreements.
"More financial relief should be given to SMEs, including the possibility of lowering the service tax rate on non-residential rental and leasing services for micro, small and medium enterprises from 6% to 4%," it added.
It also said the e-invoicing exemption threshold should be increased to RM3mil in annual turnover or revenue from RM1mil, allowing SMEs to manage rising operational costs without the added burden of mandatory compliance.
Under current e-invoice guidelines, consolidated e-invoicing is not permitted once a single transaction reaches RM10,000, ACCCIM noted.
It also proposed reviewing e-invoicing transaction thresholds by aligning cash transaction reporting thresholds with broader anti-money laundering (AML) requirements to RM25,000 for general transactions.
It proposed that dealers in precious metals and stones be accorded a higher threshold of RM50,000, aligned to the AML framework on customer due diligence requirements.
"The definition of SMEs should also be reviewed and updated to reflect current economic conditions and business scale changes.
"This ensures mid-tier companies are not unintentionally excluded from SME-related incentives and support measures," it said.
It also hoped that the budget wil include regulatory certainty, ease operational costs, improve tax structures, and boost SME competitiveness alongside targeted measures to drive the growth of sectors such as the digital, renewable energy and circular economy.
