Beauty services exempted from expanded SST
Services like manicures, pedicures, facials and hairdressing will continue to be exempted from SST. (Envato Elements pic)
PETALING JAYA : The finance ministry has decided not to include beauty services under the expanded sales and service tax (SST) which comes into effect on July 1.
The Treasury said the decision was made by Prime Minister Anwar Ibrahim, who is also finance minister, in view of public sentiments.
This decision means that services like manicures, pedicures, facials and hairdressing would be exempted from the expanded SST.
An 8% service tax rate was set to be imposed on the sector for services exceeding RM500,000 in a 12-month period.
Former finance minister Lim Guan Eng had warned that this would anger women voters and called for the expanded SST to be postponed as a whole.
In a statement, the ministry also said mandarin oranges and dates would be exempted from SST.
'The ministry would like to reiterate that the Madani government has not imposed any sales tax on daily essential goods, in order to mitigate pressure on the cost of living for the majority of Malaysians.
'These tax-exempted essential goods, whether locally-produced or imported, include rice, chicken, beef, vegetables and eggs. Local fish varieties, including selar, tongkol, cencaru and sardines – whether frozen, chilled or fresh – will also continue to be exempted from the sales tax,' it said.
Yesterday, Anwar announced that imported oranges and apples would be exempted from the SST as many from among the B40 income group would buy these fruits as they were affordable.
Putrajaya has also decided to raise the service tax registration threshold for leasing or rental and financial services from RM500,000 to RM1 million, to reduce the number of small businesses that would be affected.
Initially, an 8% service tax rate was to be charged for these services.
Similarly, the threshold for businesses subject to service tax on rental services has also been raised from RM500,000 in annual sales to RM1 million.
'This means that only businesses with sales exceeding RM1 million will be required to pay service tax on rental services, providing relief to more micro, small, and medium-sized enterprises (MSMEs).'
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