KUALA LUMPUR (Feb 7): Sales and Service Tax (SST) revenue for 2024 is estimated at RM44.7 billion, exceeding the initial expectations of RM41.3 billion, the Ministry of Finance (MOF) said.

However, the final amount will be confirmed in the federal government’s financial statement for 2024, the ministry stated in a written parliamentary reply to Chong Zhemin (Pakatan Harapan-Kampar) on Thursday.

Chong inquired about the total SST collected last year, and how it compared to initial projections.

Malaysia has increased the service tax from 6% to 8%, imposed ad valorem on taxable and digital services since March 2024, with certain exceptions — such as logistics, food and beverages, telecommunications, and parking space services — which remain taxed at 6%.

Sales tax, applicable to taxable goods manufactured in or imported into Malaysia, is levied at 10%.

In response to a separate inquiry from Datuk Seri Wee Ka Siong (BN-Ayer Hitam), the MOF said that the finalised SST scope expansion and rate review will be gazetted through subsidiary legislation in the first quarter of 2025.

This will follow the completion of stakeholder engagement sessions to ensure sufficient preparation before enforcement, the ministry added. “The MOF and the Royal Malaysian Customs Department are actively engaging with ministries and industries to finalise the scope and tax rates involved.”

After evaluating feedback from these engagements, the government will propose maintaining a 0% sales tax on essential goods, while expanding the 5% and 10% rates to non-essential, processed, high-value, and imported goods, the MOF noted.

For service tax, the proposed rates of 6% and 8% will be extended to specific service sectors. Discussions also address the complexities and potential impacts on affected industries.

The MOF added that engagements have also covered emerging issues and their potential impact on the relevant service sectors.

The ministry assured that the government will ensure tax rate adjustments do not burden vulnerable groups, and that inflationary effects remain controlled.

When tabling Budget 2025 in October last year, Prime Minister Datuk Seri Anwar Ibrahim announced the government’s plan to expand the SST scope, a move expected to generate an additional RM5 billion in revenue for the nation.

Excise duty on sugary drinks
The MOF also reported that total excise duty collected on sugary drinks from 2019 to 2024 amounted to RM447.5 million.

“The revenue generated will be used to fund public health expenses, including increasing the supply of SGLT-2 inhibitors for diabetes treatment, and peritoneal dialysis for end-stage kidney disease patients,” the ministry said.

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