Updates on SST Expansion

 

Following the announcement on 9 June 2025 regarding the Sales Tax revision and Service Tax expansion, the MADANI Government has engaged with the public, industry stakeholders and backbenchers to gather feedback and address concerns. In line with this, on 27 June 2025, the Minister of Finance (MOF) announced four (4) key amendments to the previously expanded scope of the Sales Tax and Service Tax, effective 1 July 2025: 

 

·        Exemption from Sales Tax for selected imported fruits;

·        Increase in annual sales thresholds for rental or leasing and financial services;

·        Increase in annual sales threshold for Micro, Small and Medium Enterprises (MSMEs) to qualify for Service Tax exemption; and

·        Removal of newly taxable services under the Service Tax expansion. 

In addition, the Royal Malaysian Customs Department has issued further guidelines and policies relating to the Sales Tax revision and Service Tax expansion.

 

In line with the Government’s commitment not to impose Sales Tax on daily essential goods as part of the effort to ease the cost of living for Malaysians, the MOF has agreed to maintain the Sales Tax exemption on selected essential goods.

 

These Sales Tax-exempt essentials whether locally produced or imported include rice, chicken, beef, vegetables and eggs. In addition, local fish varieties such as selar, tongkol, cencaru and sardines, whether frozen, chilled or fresh, will continue to be exempted from Sales Tax.

Furthermore, the MOF has agreed to extend the Sales Tax exemption to imported apples, oranges, mandarin oranges and dates.

 

1.     Increase in the Registration Threshold 
A person who provides taxable services exceeding the registration threshold is required to be registered for Service Tax. The table below outlines the revised Service Tax registration thresholds:

 

2.     Increase in Annual Sales Threshold
Tenants classified as Micro, Small and Medium Enterprises (MSMEs) are exempted from Service Tax on rental and leasing services. The table below outlines the revised annual sales thresholds for MSMEs to qualify for the Service Tax exemption: 

 

3.  Group C – Wellness Centre - Removal of beauty services from the list of newly taxable services under the Service Tax expansion 

MOF has decided not to proceed with the proposed expansion of the Service Tax to include beauty services, including:

 

·        Manicure and pedicure treatments;

·        Facial services; and

·        Barber and hairdressing services. 

Despite the recent amendments, any person affected by the Sales Tax revision and Service Tax expansion is still required to assess and monitor whether the value of their taxable goods and/or taxable services exceeds the registration threshold within any 12-month period. 

The business-to-business (B2B) exemption and group relief are still permitted for certain newly taxable services to help reduce the impact of double taxation. The specified conditions for non-reviewable contracts are now available and those eligible will benefit from this until 30 June 2026. 

The exemption from being subject to compound, prosecution and penalty until 31 December 2025 does not apply to fraud offences or offences committed intentionally. 

Reference:

SST Expansion 2025 Updates, Crowe Malaysia PLT, 9 July 2025

Is PKR Losing Its Passion?

Murray Hunter’s recent essay on the collapse of Parti Keadilan Rakyat (PKR) reads less like speculative commentary and more like a post-mortem report. What was once Malaysia’s most potent symbol of political reform now resembles a relic from a different era — like an old Reformasi rally poster beaten in the rain, half-forgotten. 

Anwar Ibrahim’s personal odyssey from jailed dissident to prime minister was once sold as Malaysia’s great political redemption arc. It promised not just power for its protagonist, but structural reforms. Today, the party and the coalition he stitched together through royal intervention — is haemorrhaging credibility, support and belief.

 

 

The political implications of this are far-reaching. PKR was meant to be the conscience of Pakatan Harapan. It carried the burden of hope, of idealism, of unfulfilled promises. Its weakening signals not just the end of a party, but the erosion of a reform project many Malaysians hung their futures on. When PKR withers, it leaves behind a vacuum. 

 

The economic pressures — spiralling costs of living, stagnant wages, hollow job growth — only deepened public disenchantment. The government has neither the populist touch of Najib’s BR1M era nor the moral high ground of his pre-2022 campaign. What’s left is a Madani administration that speaks of inclusion while presiding over rising ethnic insecurities, legal regressions, and elite impunity.

 

The Sabah state elections later this year could be an early warning siren. Deputy president Nurul Izzah’s claim that PKR will win 13 seats rings more desperate than defiant. And if PMX’s pending legal entanglements resurface, it would add fuel to an already combustible political climate.

 

The downward spiral of PKR would also leave Pakatan Harapan badly exposed. The DAP, still solid in urban Chinese-majority seats, has little appetite to lead a multiethnic coalition alone. Amanah is too minor, and the professional-class Malay voters are unlikely to rally behind UMNO or PAS in a post-PKR scenario.

 

This is how political vacuums birth reactionary populism. If the reformasi generation leaves the field disillusioned, who takes their place? In Malaysia, where politics abhors both an honest man and an empty chair, the answer is rarely good.

 

For years, critics have argued PMX wants to be prime minister more than to govern. The events of the past year suggest they were right. Look at several instances of dithering and blundering – no CJ, no reshuffle of Cabinet or filling of vacancies; no meaningful reforms; no action on so-called “rebels”. The tragedy is that a generation’s hope for a better Malaysia may well be the collateral damage of that ambition.

 

We are, perhaps, watching a political fable unravel. The consequences will not be limited to PKR or PMX’s legacy, it will reverberate through the country’s social fabric, its economy, and frayed sense of national purpose.  Malaysia doesn’t just need a new leader. It needs a committed movement for change!

 

Reference:

Opinion: Anwar’s PKR Is Crumbling — And It Matters for All of Us, Mihar Dias, https://newswav.com, 12 July 2025

Has Healthcare Flatlined?

 

The healthcare sector is grappling with rising costs, understaffing and growing demand from middle-income earners who are increasingly turning to public services as they are priced out of private healthcare due to high insurance premiums and soaring medical costs. The government spends a significant amount on healthcare every year – and the absolute figure has risen rapidly – as a percentage of gross domestic product (GDP). But this is still underinvesting. Under Budget 2025, the government allocated RM45.3bil, or 4.7% of GDP. This represents a nearly 10% increase from Budget 2024 in percentage-of-GDP terms, and a 13.5% increase in absolute terms compared to Budget 2023.

 

Source: https://en.wikipedia.org

Healthcare advocates have long lobbied the government to allocate at least 5% of GDP to healthcare. At 5%, Malaysia’s healthcare spending would remain substantially lower than the often-cited Organisation for Economic Cooperation and Development (OECD) benchmark of between 8% and 10% of GDP. According to an OECD policy brief released last December, members countries allocated an average of 8.8% of GDP to healthcare in 2019. 

According to a PwC Malaysia report published last June, countries in the upper-middle income bracket should allocate 6% to 7% of GDP to public healthcare – above the firm’s estimated 5.1% allocation for Malaysia. The report suggests greater public-private partnership as a viable option for the government to consider in reforming the dual-healthcare system. It notes that forward-looking private healthcare providers could collaborate with their public counterparts to improve service delivery and capacity. Malaysia’s ageing demographic adds urgency to this issue. 

Currently, just over 8% of the population is aged 65 and above. By 2040, the country will be classified as an aged society, with approximately 15% of the population aged 65 and older. Upgrading public healthcare infrastructure takes time – so does training and nurturing talent. This is where the government can make a real difference, by allocating a higher percentage of GDP to healthcare. 

The resources are there – the expanded SST is estimated to generate up to RM5bil annually, while the diesel subsidy rationalisation could save up to RM7.5bil per year, according to government projections earlier this year. Beyond SST, more tariff hikes are likely.

A proposed water tariff hike is in the pipeline, and the base electricity tariff hike effective July 1 in Peninsular Malaysia is likely to generate savings (the government allocated nearly RM2.4bil in electricity subsidies for the first half of 2025).  Additionally, the pending rationalisation of the RON95 fuel subsidy is estimated to save up to RM8bil annually. 

Malaysia’s public healthcare system is under strain, but the problems can be fixed. The system proved its resilience during the Covid-19 pandemic, outperforming even some developed countries’ healthcare systems. What’s needed now is not a quick fix that shifts the burden onto ordinary wage earners by dipping into their retirement funds, but a long-term commitment to structural reform. 

Revenue generated from the SST expansion and savings from subsidy rationalisation should be ploughed back into the public healthcare system. This would not only strengthen capacity but also ensure that even middle-income earners – many of whom already pay taxes and hold private insurance – can continue to access quality public healthcare when needed. 

Reference:

Budget remedy needed as healthcare flatlines, Fintan Ng, The Star, 5 July 2025

 

 

7 Types of People Not to Give a Second Chance!

 1.   Serial Liars

According to research on deception and trust by Knapp and Vangelisti (2018), once trust is broken, it's incredibly challenging to restore. The psychological toll of constantly doubting someone's words can lead to anxiety, reduced self-esteem, and a pervasive sense of betrayal. When faced with chronic deception, it's crucial to recognize that rebuilding a shattered trust foundation might not be worth the emotional investment. Alternatively, prioritize relationships where honesty reigns supreme, and mutual respect forms the bedrock. 

Source: https://en.wikipedia.org

2. Emotional Vampires 

Have you ever been part of a discussion and emerged feeling as if you've just run a marathon, mentally and emotionally spent? Welcome to the aftermath of engaging with an emotional vampire. These individuals feed on others' energy, often leaving them depleted and overwhelmed in return. Unlike mutual exchanges of support and care, interactions with emotional vampires are unidirectional—you're always the giver, and they, the endless taker. 

In a study on emotional contagion, it is highlighted how certain people can heavily influence your mood and energy levels through their constant conveying of negativity or neediness. Over time, this can lead to emotional exhaustion, strained resources, and an imbalanced relationship dynamic. It's crucial to establish boundaries and practice self-care, ensuring your well-being takes precedence. Your emotional energy isn't infinite—it demands careful conservation and protection from needless drains. 

3. Chronic Critics 

Baumgardner and Crothers (2015) discuss how consistent exposure to negative feedback can escalate stress levels to mirror that experienced in traumatic circumstances. It becomes a relentless assault on one's self-esteem, inducing feelings of inadequacy and helplessness. It's vital to differentiate between constructive feedback, which nurtures growth, and habitual criticism that deteriorates self-worth. Take care to distance yourself from relentless negativity and surround yourself with voices that uplift and encourage. 

4. Unapologetic Repeat Offenders 

This is particularly draining because it plays on the hopeful human tendency to believe in second chances and redemption. However, psychological theory reminds us that genuine change requires concerted effort and introspection—elements often missing in repeat offenders. Tolerate their behaviour with caution, observing actions over words. Protect your emotional health and consider whether continual forgiveness may inadvertently enable their damaging patterns. 

5. Fairweather Friends 

During life's inevitable challenges—be it illness, job loss, or emotional distress—having steadfast companions is invaluable. According to psychological studies, authentic friendships are founded on reciprocity, empathy, and mutual understanding (Fehr, 1996). If you notice someone consistently retreating at the first sign of hardship, it may be time to re-evaluate their role in your life. Seek out those who stay through thick and thin, ensuring a network of genuine, supportive connections. 

6. One-Uppers 

Psychologically speaking, one-uppers often have an insatiable drive for validation and self-importance. Their behaviour can undermine meaningful interactions, shifting focus from shared moments to their tune of triumph. Acknowledging this dynamic empowers you to set boundaries, embracing those who genuinely celebrate your successes and empathize with your challenges. Keeping genuine companionship at the forefront leads to more fulfilling interactions. 

7. Manipulators 

It is a fact that manipulation can warp your perception of reality, often leading to feelings of self-doubt and a compromised sense of self-worth. The impact of prolonged manipulation can be devastating, fraying the emotional fabric of those involved. It’s critical to reclaim your agency in such situations by steadfastly maintaining personal boundaries and prioritizing mental health. Remember, you deserve relationships predicated on respect, honesty, and mutual empowerment. 

To work through terrains of human relationships is an art. Everyone deserves a chance but not those who drain, stress, fail to add value to your well-being. Prioritising your mental health is never the wrong choice. And you are on planet Earth to add value in the lives of others! 

Reference:

7 types of people not to give a second chance to, Tekkaus, June 2025

 

 

 

 

 

 

 

 

 

Battle for Higher Wages?

As of June 30, 2025, RM11bil had been deployed into high-growth, high-value sectors such as semiconductors and the energy transition, as well as initiatives to uplift underserved communities and develop local talent, says the MoF. 

The MoF says it is delivering on its promise to raise the rakyat’s quality of life and lead the national agenda for wage reform. GLCs are to commit to pay a minimum of RM3,100 a month and drive the economy.

 

Source: https://www.wikiimpact.com

The RM3,100 threshold is a Living Wage, the amount of money deemed just enough for Malaysians to afford the basics in life. That means that the monthly wages will be enough for housing, food and other essentials. 

The cost of living in the country is different for Malaysians compared to foreign workers, who are more likely to sacrifice much of what Malaysians will consume to save their money to be remitted back home. The irony is that the living wage is way higher – almost double – than the minimum wage and what the government pays its lowest-paid civil servant. The current minimum wage is RM1,700 a month. By right, the minimum wage should be at least the amount of money it takes a Malaysian to live with some dignity. The poverty line income in Malaysia is said to be RM2,589 – and that was in 2022! 

Both those incomes will make it hard for Malaysians to live decently in the country without having to take a second job to make ends meet. The government’s recent civil servant pay hike saw a 15% to 43% rise in salaries, and that added more than RM10bil in emoluments being spent by the government, with the bill hitting RM140bil a year. 

Setting a precedent with the living wage for GLCs is fine, but it needs to be expanded across the board. Setting the minimum wage at such a level just incentivises companies to pay that for its entry-level staff, especially if workers are not employed by larger companies. 

In a scenario of rising cost of living, wages need to be revised and hopefully productivity will also improve. Otherwise, we will have low output, high costs and non-competitive products and services! 

Reference:

Waging a battle for better pay, Jagdev Singh Sidhu, The Star, 5 July 2025

Can We Counter 25% US Tariff Impact?

The Federation of Malaysian Manufacturing (FMM) has expressed deep concern over the latest announcement under the US reciprocal tariffs which will see a 25% blanket tariff imposed on all Malaysian products entering the US market effective Aug 1. 

This announcement comes as a surprise given the intensive and on-going negotiations between the Malaysian government and the US coordinated by the Investment, Trade and Industry Ministry (MITI) under the National Geoeconomic Command Centre (NGCC) framework. Why is the Minister in Washington jogging when we could have done that in Putrajaya?

 

 

The manufacturing sector is already impacted from the earlier 10% US tariff and escalating domestic cost pressures, including the expanded Sales and Service Tax (SST) and electricity base tariff revisions. The latest escalation risks further de-stabilising an already fragile industrial landscape, severely impacting export competitiveness and placing additional strain on manufacturers. Feedback from manufacturers as gathered by FMM during the initial 10% US reciprocal tariff implementation already pointed to serious concerns over the sustainability of export operations with many warning that further tariff hikes would result in significant declines in shipments and severe erosion of profit margins. 

Most Malaysian exports including rubber products, textiles, furniture and industrial components will be adversely affected, thus placing added strain on companies already grappling with rising input costs and market uncertainty. Although Malaysia’s initial proposed 24% tariff in April 2025 was lower than peers such as Cambodia, Vietnam and Thailand, the new blanket 25% rate places Malaysia in a more punitive position, especially as Vietnam has since secured a bilateral arrangement which reduces its rate to 20%. 

Compounding the issue, other ASEAN members such as Singapore, Brunei and the Philippines were not named in the latest tariff wave. These disparities risk diverting US sourcing to lower tariff alternatives and eroding Malaysia’s market share. 

Our compliance record, investment linkages and value-added contribution should form the basis for seeking targeted relief or differentiated treatment to prevent long term structural damage to Malaysia’s export position. This was expressed by FMM. But are we doing anything seriously about this or just jogging along? 

Reference:

Where have we erred? FMM urges swift diplomatic interventions to counter 25% US tariff impact, Focus Malaysia, 8 July 2025

 

Houston, We Have a Problem!

Malaysia is planning to build one or two rocket launch sites – one in Sabah and the other in Pahang. By 2026, we could blast payloads into orbit! 

We can’t afford avocados but not going to space! The Science, Technology and Innovation Minister said a feasibility study is underway. Never mind about potholes, leaky roofs, rising prices, lack of internet or poor education system, launching satellites will fix that.

 

Source: https://en.wikipedia.org

Once upon a time, we were looking at flying cars, then a 3^rd national car but now we ready for space – to go where no man has gone before! Are we renting these launch pads to foreigners while we watch? Do we have safety protocols, EIA studies, skilled workforce? 

We can dream big! But please fix recurring floods, gas pipelines, corruption, the judicial appointments, quality of schools and institutions and then have a pool of STEM people to lay the groundwork for space. India has a science and engineering base; so, does China or Japan. Our base is humanities, and you want to reach the moon?  

Reference:

Comment: Houston, we have a ‘reality’ issue! Joseph Masilamany, Malaysiakini, 4 July 2025