KUALA LUMPUR: The Ministry of Finance projects that Sales and Services Tax collection on imported fruits will generate an additional RM38 million in annual revenue starting from 2026.
This forms part of a broader SST review and expansion effective from July 1, 2025, which is expected to yield an extra RM10 billion annually from 2026.
The ministry stated that the SST rate review aims to strengthen the country’s fiscal position while promoting and supporting the local fruit industry.
“However, the government has taken public feedback into account and revised the rates to exempt selected imported fruits such as apples, oranges, dates, and mandarin oranges.
“This decision was made to ensure guaranteed access to nutritious and commonly consumed foods, especially for vulnerable groups,” it said in a written response on the Parliament’s website.
The ministry was responding to Jimmy Puah Wee Tse regarding the expected revenue collection from the SST expansion, particularly on imported fruits.
The MOF emphasised that the SST expansion is targeted and includes certain facilities and exemptions as mitigation measures to ensure a fair distribution of the tax burden.
In a separate response, the ministry confirmed that the government currently has no plans to reintroduce the Goods and Services Tax due to the population’s generally low income levels.
“The implementation of SST can provide a faster fiscal impact to the government compared to reintroducing GST, which requires a longer preparation period of up to two years to allow companies to update their systems to handle GST.
“Additionally, SST is viewed as more progressive compared to reintroducing GST.
“This is due to the targeted structure and implementation of SST expansion, where goods and services commonly used by the majority of the population are generally not taxed,” it said when responding to a question from Datuk Seri Dr Wee Ka Siong.
Wee had queried why the government has not reintroduced the more efficient GST system given the SST expansion’s broad coverage.
The MOF highlighted that after the sales tax rate review, the number of exempted or zero-rated items will total 1,826 goods.
“This figure is higher than the 607 zero-rated items under GST before it was abolished in 2018.
“The expansion of service tax scope involves taxing 70 per cent of the services listed under the Malaysia Standard Industrial Classification codes, compared to 76 per cent of the scope of services taxed under GST,” it added.
The ministry concluded that the greater number of exempted goods and lower percentage of services taxed under SST demonstrate the government’s concern for public well-being while ensuring fiscal sustainability aligned with the MADANI Economic Framework. – Bernama