Newly introduced SST ‘tax on tax’ needs urgent review

THE government’s decision to raise the e-invoicing threshold to RM1mil and above is a timely and welcome relief for hundreds of thousands of small businesses. By exempting more than 90% of firms from immediate compliance – while retaining coverage over companies that contribute more than 80% of GDP – the Cabinet has taken a practical step that reduces administrative burden without sacrificing revenue oversight.

Yet as regulatory pressures ease on one front, attention must now shift to a more systemic concern: the cascading impact arising from the expanded sales and service tax (SST). If left unaddressed this emerging “tax-on-tax” structure risks raising business costs, weakening margins, and eroding Malaysia’s competitiveness at a time when global competition is intensifying.