ACCCIM urges delay of expanded SST to 2026, lower initial rate

The government was urged to postpone the implementation of the expanded sales and service tax (SST) from July 1, 2025, to January 2026.

The Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) said this is to allow more time for preparation, as several areas still require clarification.

The group “cautiously welcomed” the government’s announcement on the review of the expanded SST on Thursday.

However, it called on the government to reduce the expanded SST to a lower rate of four percent in the first two years (2026-2027) to ease the tax burden on businesses and consumers.

The expanded SST applies to additional services (wellness centres, financial, and healthcare) and three new services (rental or leasing, construction works, and education), it said in a statement today.

“Adequate preparation is crucial to ensure better compliance and smooth implementation,” ACCCIM said.

It cited concerns over multiple cost increases coinciding with a challenging global and domestic economic environment, exacerbated by uncertainty surrounding tariff policies and Middle East conflicts.

“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 added.

ACCCIM urges higher SST thresholds, exemptions

Meanwhile, ACCCIM urged the government to raise the registration threshold for service tax on leasing or rental, as well as construction services, from RM1 million to RM3 million.

It also called on the government to raise the tax exemption threshold for SME tenants to RM2 million in annual sales, from RM1 million announced on Thursday.

“We also propose a longer exemption period of 36 months for non-reviewable and reviewable contracts, to cover all project types due to the nature of the projects and their cycles,” it said.

ACCCIM said it will continue to engage with its members and industry stakeholders to provide constructive feedback and solutions to the government to soften the impact of the SST on businesses and households.

- Bernama

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