Avocados from Australia, salmon from Norway, king crabs from Alaska, and mangoes from Thailand have become hot potatoes in Malaysia. PMX expanded the list of imported foods that will be taxed from July 1 to boost government coffers. Howls of protest has surfaced. And prices will increase by RM1 to RM2 for some fruits.
The widening of the SST in July 2025 has included a wide range of businesses like the leasing or rental of premises, construction, financial services, private healthcare and beauty services (which has now been exempted).
Source:
https://www.financialexpress.com
The expansion of the SST is just the latest controversial move by the government on the economic front. The government is also mulling over whether to stop commercial eateries from using subsidised cooking gas, remove subsidies for RON95, and other similar items.
All these are part of a broader move by the Government to wean the public off government subsidies and boost public revenues.
And hovering over the whole economy is the
uncertainty over how badly the Malaysian economy would be hit by US tariff. With
all the negative noise, some back-pedalling was done! When presenting the 2025
Budget in October last year, the government said that the proposed SST
expansion will generate an additional RM5 billion to bring the consumption
tax collection to RM51.7 billion.
PMX as Finance Minister is looking at what international rating agencies will say if he does not re-calibrate his fiscal position. There are several other taxes that could generate RM5-10 billion in revenue and meet his objective. And that too from the “maha kaya” (as he calls the ultra-rich). But he is shying away from that and instead is milking his B40 and M40 constituents. He is headed for a hot potato soup in GE16!
Reference:
Malaysians fret over hotpot of
bad economic news, as govt moves to expand sales and services tax, Lu Wei Hoong, The Straits Times, published 19
Jun 2025
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