Service Tax increase to 8% in 2024
As part of Malaysia's 2024 Budget proposals, it is proposed to raise the Service Tax by 2%, from the current rate of 6% to 8%. Food, beverages, telecommunications, and other things that are primarily consumer-based will not be affected. The proposed 2% increase is expected to raise an additional revenue of RM3 billion in the first year.
During the 2024 Post-Budget Debate, the Treasury Secretary, Datuk Jojan Mahmood Merican, stated that it was necessary to broaden the tax base. He also discussed the reintroduction of the GST system, stating that “We are studying what is the best way to do this (implementing the GST). But, obviously, there are some areas that we need to improve, how do we ensure the efficiency of refunds and so on,”
Further, the Budget introduces a new Luxury Tax, which is expected to apply to the sale of jewelry and watches.
Budget 2024 was presented to Parliament on October 13, but timelines for these proposed rate changes have yet to be determined.