SST, new electricity tariff set to test economy in Q3 2025
These two measures occurring simultaneously, marked a new phase in the country's business and economic landscape.
The implementation of the expansion and adjustment of the Sales and Service Tax (SST) begins today.
Starting today (July 1), the government will implement the expansion of the Sales and Service Tax (SST), which is expected to impact industries and the public.
Additionally, the implementation of the new electricity tariff schedule will also commence on the same day, reflecting changes in surcharge and rebate rates that will affect domestic and commercial users' bills.
These two measures, namely the SST expansion and the new electricity tariff schedule, occurring simultaneously, marked a new phase in the country's business and economic landscape.
In this context, observing the impact on consumers, businesses and certain economic sectors became increasingly important, especially as the third quarter of 2025 was expected to be challenging.
The Domestic Trade and Cost of Living Ministry will launch Ops Kesan 4.0 to ensure traders do not take advantage by arbitrarily increasing the prices of goods and services following the revision of the sales tax rate and the expansion of the service tax scope.
Its minister Datuk Armizan Mohd Ali said the implementation of Ops Kesan will take effect today, the same day as the implementation of the SST revisions and scope expansion.
He said the focus of monitoring and enforcement was to ensure traders at all levels do not take advantage by unreasonably raising the prices of goods and services in contravention of the laws under the Price Control and Anti-Profiteering Act 2011.
This situation showed that the government has made early preparations to reduce the direct impact of the implementation of the new fiscal policy on consumers and businesses.
The implementation of Ops Kesan 4.0 by the ministry was an immediate control measure to ensure prices remained stable and were not arbitrarily manipulated.
However, the anticipated short-term effects cannot be overlooked.
Consumers may experience price increases for certain goods and services, particularly those not previously subject to service tax, such as logistics, maintenance and some professional services.
For traders, operational costs were likely to increase due to the combination of two factors: additional taxes through SST and higher electricity bills under the new tariff schedule.
This was expected to have a bigger impact on small and medium enterprises, especially those with low profit margins.
In the industrial sector, particularly manufacturing, changes in electricity tariff rates will directly impact production costs, leading to higher final product prices, thereby affecting consumers' purchasing power.
So far, the SST implementation has received mixed reactions from businesses and consumers.
Some supported it for the sake of the country's economy, but many were concerned about the ripple effects on market prices.
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