ACCCIM: Consider timing of expanded SST

KUALA LUMPUR: The Associated Chinese Chambers of Commerce and Industry of Malaysia (Acccim) says it supports the expanded Sales and Services Tax (SST) to strengthen the country's fiscal's position.
But there must be careful consideration of the timing and sequencing of measures to ensure they do not unduly burden businesses, especially the micro, small and medium enterprises (MSMEs), it added.
Ultimately, increased business costs can lead to higher consumer inflation, according to Acccim president Datuk Ng Yih Pyng.
Ng said the expansion of the SST at a time of the evolving US tariff policy uncertainty and potential global economic slowdown would contribute to domestic economic and business conditions uncertainty.
"With businesses already facing rising operating costs, implementing expanded SST could further burden businesses with increased costs.
"Ultimately, increased business costs, if not absorbed, would be passed onto consumers, potentially dampen discretionary consumer spending due to higher prices of non-essential goods and a wider range of taxed services."
Ng added that the service tax on rental and leasing in particular would result in higher operating cost for many businesses given a low threshold of exemption from paying service tax for MSMEs with annual sales below RM500,000.
"In this regard, we appeal to the government to consider deferring the implementation of the expanded SST to a later date, when macroeconomic conditions are more certain.
"It must be noted that the deferment of e-invoicing implementation for businesses with annual income or sales between RM1 million and RM5 million (Phase IV) from July 1, 2025 to Jan 1, 2026 reflects the government's acknowledgment and consideration of businesses' concerns regarding its impact on operating costs," he said.
Acccim also called for a review of the threshold exemption from the SST expansion, to be raised higher to RM2 million annual sales, to relieve the burden on more micro and small businesses.

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