Pause SST expansion to protect businesses and people

THE recommendation by the Associated Chinese Chambers of Commerce and Industry of Malaysia (Accim) Socio-Economic Research Centre for the government to temporarily pause the planned expansion of the sales and services tax (SST) from July 1, 2026, warrants support.

A three-month delay, with reviews every three months, is a practical and necessary step, given today’s uncertain economic conditions.

The government has already expanded SST to sectors such as leasing, construction, healthcare and education. These are essential areas that directly affect business costs and the daily expenses of ordinary people.

Moving ahead with further expansion too quickly will only add more pressure.

In the current climate, businesses are already struggling with rising costs and unstable global conditions. Pushing through new taxes now could create a chain reaction – higher costs for businesses, which will then be passed on to consumers through higher prices.

This proposed temporary pause needs to be supported for several clear reasons:

1. It helps businesses manage cash flow. Many companies, especially small and medium enterprises, are facing tight finances due to rising costs. A delay will give them breathing room.

2. It helps keep prices stable. If more taxes are imposed, businesses will have no choice but to raise prices. This will increase the cost of living for the public.

3. It gives businesses time to adjust. Changes in tax policy require updates to systems, pricing and financial planning. A rushed rollout will only create confusion and higher compliance costs.

4. It will boost confidence. When the government shows flexibility and listens to concerns, it reassures businesses and investors, helping the economy recover.

5. Regular three-month reviews allow the government to make better decisions based on real economic conditions, instead of rushing into long-term policies.

This pause is not about cancelling the tax but about getting the timing right. The government must balance its need for revenue with the ability of businesses and the public to cope.

At the end of the day, policies must be practical and people- focused. The voices of businesses and the rakyat must be heard and taken seriously.

DATUK DR MAH HANG SOON

MCA deputy president