Latest news with #RM10bil
The Star
10 hours ago
- Business
- The Star
SST on commercial rental will impact retail sector, says MRCA
PETALING JAYA: The Malaysian Retail Chain Association (MRCA) has called on the government to postpone the implementation of the 8% sales and service tax (SST) on rental and leasing services, due to come into effect on July 1. MRCA said while it recognises the government's intention to broaden the national tax base and enhance fiscal sustainability through targeted measures, extending SST to commercial rental presents considerable challenges to retailers operating physical outlets. ALSO READ: Expanded SST comes into effect July 1 "The additional cost burden comes at a time when many businesses are already contending with rising operational expenses, including minimum wage adjustments, stamping of employee contracts and heightened regulatory compliance," it said in a statement on Friday (June 20). "In the context of the supply chain from manufacturers and distributors to retailers, the increased cost of doing business is expected to translate into higher end prices for consumers," it added. ALSO READ: Expanded SST will add RM5bil to national coffers in 2025, RM10bil in 2026 MRCA said retailers across the board may find it increasingly difficult to absorb these additional expenses, particularly with a weaker consumer sentiment amid expectations of gradual government subsidy removal. MRCA said it will continue to engage with the Finance Ministry and relevant agencies to ensure that policy implementation remains balanced, transparent and conducive to the sustainable growth of the retail sector.
The Star
2 days ago
- Business
- The Star
Expanded SST will add RM10bil to national coffers in 2026, says Finance Ministry
PETALING JAYA: The total collection from the Sales and Service Tax (SST) is expected to increase by RM5bil in 2025 and RM10bil in 2026 following its review and scope expansion, says the Finance Minsitry. The inflation rate is expected to be under control at 0.25 per cent after the implementation of the expanded SST which starts on July 1, 2025. – Bernama More to come
The Star
4 days ago
- Business
- The Star
Skills training key to labour reform vision, says Sim
Sharing his thoughts: Sim speaking at the Human Resources Development Corp National Training Week (NTW) 2025 event in Klang. — KK SHAM/The Star KLANG: The vision for national labour market reforms includes improving the welfare of workers, and enhancing their skills and productivity, says the Human Resources Minister. With this in mind, Steven Sim said RM10bil was set aside annually for skills education, proving the government's commitment to prioritising extensive skills training. 'We want to familiarise Malaysians with skills training by making it a culture and a trend, and making it mainstream,'' he said at a Human Resources Development Corp National Training Week (NTW) 2025 event held here yesterday. Sim said this year's NTW, which targeted one million Malaysians, exceeded the target by training double the figure within the week-long period. He said although the training duration was short-term, the outcome had a strong impact on upskilling the participants. 'Studies have shown that over 35% of employers are recognising short-term courses when evaluating potential employees,' he added. Sim said bosses wanted to increase profits and workers wanted higher wages, adding that the conduit to realising both aims was higher productivity. 'And to achieve higher productivity, our workers must have better skills,' he added. The event yesterday, Logistics Unboxed: Empowering Workforce Beyond Borders, was aimed at empowering the logistics sector through accessible and inclusive skills training and learning. Sim described the sector as society's 'circulatory system', with shipping lanes, rail tracks, highways and distribution centres being the 'main arteries' and the final delivery system and network being the 'capillaries'. 'You can eat good nutrients and the best food in the world, but if your arteries and capillaries are clogged, your overall health will be affected. 'So even if we have the highest efficiency and technologies in production, if our logistics network is clogged, then society will be affected,' he pointed out. The minister said this was a lesson learnt during the Covid-19 pandemic when logistical delays caused backlogs with shipping containers being stuck globally, with the local shipping industry faced with various challenges. Elaborating on the logistics industry, Sim said like most modern services, the workers were rather 'invisible', adding that behind the tools, machines and vehicles, hundreds of thousands of workers kept everything running smoothly. 'We cannot just think about improving the equipment without also improving the work conditions and skills of these logistics workers,' he said.
The Star
12-06-2025
- Business
- The Star
Record deals since Merdeka
Engaging the youth: Anwar greeting students at the 2025 National TVET Day celebration in MITC, accompanied by Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi. — Bernama MELAKA: Malaysia has approved investments amounting to RM89.8bil in the first quarter of this year, the largest amount for this time period since Merdeka, says Datuk Seri Anwar Ibrahim. The Prime Minister said that this figure was a 3.7% increase compared to the same period last year, signalling strong investor confidence even as global supply chains and investments are being affected by tariffs imposed by the United States. 'This figure also demonstrates that our economy remains resilient and competitive despite global turbulence and economic uncertainty, including the imposition of tariffs by the United States,' he said during his keynote address at the 2025 National TVET Day celebration held at the Melaka International Trade Centre (MITC) in Ayer Keroh yesterday. Anwar also revealed that a major US-based chip manufacturer had recently expressed interest in investing RM10bil in Malaysia. 'In principle, we have agreed to the proposal, but we have asked the American company to hold until July 9 when President Trump is expected to finalise the new tariff rates,' he said. 'However, the investors indicated they are still keen to proceed, confident that Malaysia will not be significantly affected by the tariffs.' Anwar said that the company had requested expedited approval to begin operations in the country. 'Beyond political stability, foreign investors have also been impressed by the professionalism and discipline of our local workforce. 'This sentiment was echoed in a recent meeting with Google, where they acknowledged that Malaysia's talent pool is among the best in Asia in terms of discipline and skill,' he added. Anwar said the recent development also reinforces the fact that the government's clear policies, along with political stability, continue to position Malaysia as an attractive destination for global investment.
The Star
10-06-2025
- Business
- The Star
Manageable impact
PETALING JAYA: The impact from the implementation of the expanded sales and service tax (SST) is expected to be rather contained thanks to its targeted approach and relief measures in place. Putrajaya's announcement on Monday to roll out the expanded SST on July 1 came as no surprise as the government had previously signalled their intention to gazette the bill in early June after a slight delay from the original May deadline. The expanded SST is expected to generate an estimated RM10bil in additional tax revenue on an annualised basis. Under the enlarged SST, essential goods like rice, cooking oil, bread, sugar, medicines and basic construction materials (cement, sand, iron) will still be exempted from the sales tax. Luxury and discretionary items, however, such as king crab, imported fruits, truffle mushrooms and silk fabrics will be taxed at 5%, while premium goods like racing bicycles and antique paintings will face a 10% tax. On the services side, selected segments will be taxed between 6% and 8% including rental and leasing services, construction, financial services (fees and commissions), private healthcare for non-citizens, high-end private education institutions and beauty services. There are exemptions of course, including residential rentals, basic banking services and for smaller businesses. Hong Leong Investment Bank (HLIB) Research had described the expanded SST as a 'non-event' from a market viewpoint, with 'limited' sector profit impact, given its targeted approach. The research house said while sectors such as construction, banking, and healthcare may appear exposed, it expects any profit impact to be negligible. 'For construction services, we foresee limited impact on contractors as most contract structures allow for cost pass-through mechanisms and new project tenders are likely to be repriced, transferring the incremental cost to end-customers,' HLIB Research said in a report yesterday. Meanwhile, the research firm added it does not expect any material impact to banks with non-essential fee-based revenue accounting for only about 6% to 7% of total sector operating income. Nonetheless, HLIB Research also noted the demand for these services will stay fairly inelastic, given limited substitutability. As for private healthcare services, given that SST applies only to foreigners, and medical tourism remains a small revenue contributor (about 5% to 10%) at this stage, the research outfit said demand should remain intact. 'This is backed by Malaysia's strong clinical reputation and continued pricing advantage versus regional peers, even post-SST. 'Moreover, healthcare services are inherently price inelastic and we do not expect operators to absorb the tax. We see no earnings impact to the sector,' HLIB Research opined. This is largely concurred by other research houses with CGS International Research stating that in the bigger scheme of things, the rollout of the wider SST scope (previously delayed from May 1, 2025) indicates the country's 'wheels of reform remain in motion to responsibly consolidate its fiscal deficit position.' Nonetheless, the impact on consumers remains a key concern, especially as businesses are expected to pass higher operating and input costs onto them. On this note, CIMB Research said it remains 'slightly negative' on the expanded SST, even though various relief measures have been introduced. The research house flagged that the expanded SST is negative for the consumer sector due to increased operating costs and weaker consumer demand. 'We expect most consumer companies will need to raise selling prices to pass on additional costs, which could further weaken spending power. The expanded SST is likely to erode wallet sizes, particularly owing to higher price points for non-essential goods and the broader range of taxed services,' CIMB Research said. That said, Bank Muamalat Malaysia Bhd head of economics, market analysis and social finance Dr Mohd Afzanizam Abdul Rashid said there could be knee jerk reaction at the beginning for consumers, but thereafter the trend could normalise. 'Consumers will eventually get used to it because they are price takers,' he told StarBiz. Even so, Afzanizam also noted that this 'does not mean that the market can take things for granted'. 'We have already observed that private consumption is growing below trend levels, which goes to show that consumers are selective and cautious as they balance their needs and wants,' he said. Afzanizam is of the view that the impact from the expanded SST on inflation is likely to be manageable as there are exemptions in place. He added that the relief measures under the revised SST structure will provide some relief to the economy, as the government has to walk on a tightrope between improving the fiscal position and minimising the impact of the expanded SST to the rakyat. 'We have seen the impact from the upwards adjustment in the service tax rate from 6% to 8% which had commenced on March 1, 2024 and the diesel subsidy rationalisation on June 10, 2024. 'Inflation rate last year had moderated to 1.8% in 2024 from 2.5% in 2023. Currently, the inflation rate has been hovering at 1.4% in April and March this year,' he said. Meanwhile, economist Geoffrey Williams said there will be an increase in the prices of the newly added goods and since the SST has a cascading effect, this will also impact prices more broadly. 'However the new categories added only constitute a small part of the consumer price index basket of goods and services and the tax effect is one-off. 'Since inflation is low at the moment this is a good time to introduce the change,' he said. Further, Williams pointed out that since the new products and services added to the expanded SST are luxury and non-essential goods, low-income groups should not be affected too much. 'Moreover, existing exemptions that benefit low-income groups have also been retained in a balanced way,' he said. UOB Kay Hian Research also projects there will be a minimal impact on the consumer sector from the enlarged SST, as the increased sales tax does not apply to essential goods. While the research house noted the service tax on sizeable rental or leasing service providers to 8% will likely have an indirect spillover effect that effectively translates to marginally revised rental rates for select outlets, it is ultimately 'very digestible' by the retailer.
