Malaysia’s new 8pc service tax rate increases govt coffers without GST comeback, but may up consumers’ costs, tax firms say

People at a stall at the Ashby Road flats watch the tabling of Budget 2024 on television by Prime Minister Datuk Seri Anwar Ibrahim October 13, 2023. — Picture by Farhan NajibKUALA LUMPUR, Oct 14 — The Malaysian government will be able to increase its revenue for the country’s spending without bringing back the Goods and Services Tax , by opting to instead hike the service tax to 8 per cent under Budget 2024, tax advisory firms have said.

“As we all know, the sales and service tax regime has a ‘tax on tax’ effect and will result in higher prices. To cushion this, it is hoped that the government will expand the Business-to-Business Exemptions that is currently applicable to certain prescribed taxable services,” she added.Deloitte Malaysia’s country tax leader Sim Kwang Gek said the service tax rate hike to 8 per cent and widened coverage of taxable services under this tax would broaden Malaysia’s tax base.

“However, we are concerned that increasing the service tax rate and expanding the scope may increase the cost to businesses and impact prices down the supply chain. Thus, we anticipate the government would adopt further indirect tax reforms to increase compliance and widen the tax base,” he also said in Deloitte Malaysia’s Budget 2024 analysis released today.

PwC Malaysia’s tax leader Jagdev Singh said the service tax rate hike seems to be a temporary measure in the absence of a GST-like broad-based consumption tax. “Also, expanding the Service Tax to cover logistics services will have a cascading effect on costs, and businesses will seek to pass these on to consumers in the form of increase in prices of goods and services,” he said.

Ernst & Young Tax Consultants Malaysia Tax Leader Farah Rosley said it was expected that the Malaysian government would not revive GST in the Budget for next year.

Malaysia Latest News, Malaysia Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Budget 2024: Putrajaya to increase Sales and Service Tax to 8pcKUALA LUMPUR, Oct 13 — Putrajaya is increasing the Sales and Services Tax from 6 per cent to 8 per cent. Prime Minister Datuk Seri Anwar Ibrahim said this increase will not...
Source: malaymail - 🏆 1. / 86 Read more »

Budget 2024: Sales and Service Tax up to 8pcKuala Lumpur: Putrajaya is increasing the Sales and Services Tax from 6 per cent to 8 per cent.
Source: DailyExpress_MY - 🏆 3. / 83 Read more »

MOF: Choice between SST, GST hinges on nation's economic goalsKUALA LUMPUR: The choice between sales and service tax (SST) and the goods and services tax (GST) hinges on Malaysia&039;s economic goals, administrative ...
Source: theSundaily - 🏆 25. / 51 Read more »

Belanjawan 2024 menekan golongan rakyat pertengahan, dakwa Syed SaddiqSyed Saddiq Syed Abdul Rahman mendakwa kenaikan cukai SST hanya topeng kepada GST.
Source: fmtoday - 🏆 5. / 72 Read more »

Zahid: Kuala Kangsar MP did not contact PM to express supportKUALA LUMPUR: Kuala Kangsar Member of Parliament Datuk Iskandar Dzulkarnain Abdul Khalid, who has declared support for the Unity Government, never con...
Source: theSundaily - 🏆 25. / 51 Read more »

Ahli Parlimen Kuala Kangsar tak telefon, bertemu, atau bincang dengan PMTimbalan Perdana Menteri Zahid Hamidi berkata Iskandar Khalid menyokong Anwar Ibrahim atas kapasiti peribadi memandangkan beliau masih ahli Bersatu.
Source: fmtoday - 🏆 5. / 72 Read more »