Delay expanded SST to next year amid global uncertainty, urges ACCCIM
PETALING JAYA: The government should reconsider implementing the expanded Sales and Services Tax (SST) next year to allow more time for preparation, says the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM).
The group said adequate preparation is crucial for ensuring better compliance and smooth implementation.
"Our concern is that multiple cost increases are coinciding with a challenging global and domestic economic environment.
"This is exacerbated by the uncertainty surrounding trade tariffs policy and ongoing conflicts in the Middle East, which together create significant economic headwinds.
"The effects of rising costs, which have been felt in 2025, are expected to persist or influence the business and economic landscape in 2026," it said in a statement on Saturday (June 28).
It added that the proposed postponement of the SST implementation was among the issues raised in a letter submitted to Prime Minister Datuk Seri Anwar Ibrahim.
"We have respectfully urged the government to defer the implementation of SST to January 2026, starting with 4% for the first two years.
"We also asked that taxable services threshold registration be raised higher to RM3mil for rental or leasing services, and construction services, and the threshold of exemption from paying tax for SMEs tenants be raised higher to RM2mil annual sales.
"We also proposed a longer exemption period of 36 months for non-reviewable and reviewable contracts to cover all project types due to the type of projects and project cycles," it said.
ACCCIM also noted that while the higher SST threshold for rental and leasing services, as well as small and medium enterprise (SME) tenants, will ease compliance and financial burden, a further increase would be more suitable.
"Higher threshold is better aligned with the definition of SMEs for the services and other sectors," it said.
On the Finance Ministry's recent adjustments to fine-tune the SST framework, ACCCIM said it was a welcome move that they take cautiously.
"We cautiously welcomed the government's announcement on the review of the expanded SST, taking into account ACCCIM's concerns and feedback.
"This includes matters regarding the timing, spillover effects, scope of SST expansion, SST rate and the registration threshold of taxable services," it said.
The revision includes the exemption of SST for selected fruits, higher threshold for rental and leasing services, financial services and the exemption of selected beauty services.
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