Everything to know about Malaysia’s sales and service tax (SST) increase in 2024

Buckle up, everyone. The cost of living in Malaysia is—yup, you’ve guessed it—about to get higher. Since 1 March 2024, Malaysia’s sales and service tax (SST) has increased from six per cent to eight per cent, so prepare to fork out more money for things like staycations, spontaneous Shopee orders, and even your electricity bills. This move to increase the SST rates was announced at the tabling of Budget 2024 in October last year to the shock of Malaysians nationwide, who have already been living through the realities of inflation and rising costs of living. To break it down for you, here is a quick guide to all the services subject to the new SST rate. 

SST INCREASED TO EIGHT PER CENT

Services across the board have been affected; some more mainstream than others. While it might help to be more cautious with spending, other necessary expenses such as electricity bills, courier services, and motor vehicle services simply can’t be avoided, leaving Malaysians no choice but to bear the costs. The following groups are now subject to an increase in SST:

• Group A: Hotels, serviced apartments, and guesthouses
• Group C: Nightclubs, dance halls, cabarets, wellness centres, massage parlours
• Group D: Private clubs including clubhouses based on membership, profession, or class
• Group E: Golf courses or golf driving ranges
• Group F: Betting, sweepstakes, lotteries, gambling machines, or games of chance
• Group G: Professional services (includes legislation; accounting; assessments/appraisals; engineering and architecture; consulting, training, and tutoring; information technology and digital services; management services such as warehousing, collection & debt, parking, sports facilities and loyalty; employment services; guarding, security, and protection services) 
• Group I: Other service providers (includes insurance & takaful; customs agents; motor vehicle services; courier services; rental and chauffeur services, car rental, and excursion bus services; advertising; domestic electricity supply >600kWh and >RM220/month; local air passenger transport except Rural Air Services; finance-related brokering & guaranteeing; cleaning)

NEW SERVICES SUBJECT TO TAX

On top of the already hefty list of affected services, there are new additions on the list that are subject to SST. With that, not only will you be charged more for regular maintenance services, but your online shopping habits might also have to take a hit. The newly added services are as follows: 

• Karaoke centres (Group C)
• Maintenance or repair services (Group G)
• Brokerage and underwriting services expand to non-financial services such as ship/aircraft brokerage, commodities, and real estate (Group I)
• Logistics services (Group J – subject to six per cent tax), includes all parts of supply chain logistics management services; warehousing and warehousing management; freight forwarding services; port and airport services; shipping services; aviation services; cold chain facilities; delivery, distribution, and transportation services; delivery, distribution, and transportation services via e-commerce platforms including on behalf of anyone); licensed express delivery services; and customs agent.
• Online platforms such as Shopee, Google, and Taobao have also announced SST increases for their services of eight per cent, eight per cent, and 10 per cent respectively
• The automobile industry is also expected to be affected by the SST increase

SERVICES REMAINING AT SIX PER CENT

There is a glimmer of hope in the midst of all the rising costs, however, as some major services are exempt from the SST hike. Aside from water bills, the services that are not subject to the tax surge include: 

• Food or beverage provision services (Group B)
• Telecommunication services (Group I)
• Vehicle parking space provision services (Group I)
• Logistics services (Group J)

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