sst-update-new-malaysia

SST Update: New 5%–10% Sales Tax Starts 1 July 2025 – What SMEs Need to Know

SST Update: New 5%–10% Sales Tax Starts 1 July 2025 – What SMEs Need to Know

Update – 27 Jun 2025

𝐌𝐄𝐃𝐈𝐀 𝐑𝐄𝐋𝐄𝐀𝐒𝐄
𝐌𝐈𝐍𝐈𝐒𝐓𝐑𝐘 𝐎𝐅 𝐅𝐈𝐍𝐀𝐍𝐂𝐄
𝐑𝐄𝐕𝐈𝐒𝐈𝐎𝐍 𝐓𝐎 𝐓𝐇𝐄 𝐄𝐗𝐏𝐀𝐍𝐃𝐄𝐃 𝐒𝐀𝐋𝐄𝐒 𝐓𝐀𝐗 𝐀𝐍𝐃 𝐒𝐄𝐑𝐕𝐈𝐂𝐄 𝐓𝐀𝐗 𝐓𝐀𝐊𝐄 𝐈𝐍𝐓𝐎 𝐀𝐂𝐂𝐎𝐔𝐍𝐓 𝐏𝐔𝐁𝐋𝐈𝐂 𝐀𝐍𝐃 𝐈𝐍𝐃𝐔𝐒𝐓𝐑𝐘 𝐅𝐄𝐄𝐃𝐁𝐀𝐂𝐊

Three key amendments to the SST that will take effect on 1 July 2025

Imported apples, oranges, mandarin oranges and dates to be exempt from Sales Tax

To increase the registration threshold of Service Tax from RM500,000 to RM1 million for Leasing or Rental and Financial services

Not to proceed with the proposed expansion of Service Tax on beauty services such as manicure and pedicure; facial services; barbers and hairdressers.



Hi business owners!

Here’s an important tax update from the Ministry of Finance that SMEs like you need to be aware of. Starting 1 July 2025, the Sales and Service Tax (SST) will be expanded and revised. This means some goods and services will now be taxed at new rates of 5% or 10%, especially non-essential or luxury items.

Goods – What’s Changing?


No SST (0%) on daily essentials like:

  • Chicken, fish, rice, vegetables
  • Flour, canned sardines, cooking oil
  • Medicine and medical equipment
  • Construction materials (cement, sand, etc.)
  • Fertilizers and pesticides


New 5% SST applies to:

  • Items like abalone, lobster, cheese, quinoa, fruit jams, smartphones
  • Luxury food like king crab, salmon, truffle mushrooms
  • Essential oils, silk, and industrial machinery


New 10% SST applies to:

  • High-end goods like caviar, shark fin, alcohol, cigars, racing bicycles, and leather products


Services – New Tax Rates

  • Leasing & rental services: Taxed at 8%, including property rentals to businesses (except some small businesses earning under RM500K)
  • Construction services: Now 6% SST if your company earns over RM1.5 million/year
  • Financial services: Basic banking remains tax-free, but fees/commissions will be taxed at 8%
  • Private education & healthcare: Malaysian citizens remain exempt, but non-citizen private healthcare services will be taxed at 6%


What This Means for SMEs

  1. Review your product & service offerings – See if you’re selling any items now subject to the 5% or 10% tax.
  2. Update your pricing & accounting systems – Adjust your invoices and systems to include the new tax rates starting July.
  3. Get Registered – If you’re affected, register with Malaysian Customs Department before 31 Dec 2025.
  4. Talk to your accountant or the InTune team – let’s Let us take care of your back end so that you can free yourself to focus to grow your business.

This is part of the government’s plan to boost tax revenue and improve public services. Let’s stay prepared and compliant 💪


How InTune Outsourcing Can Support SME Business Owners?

InTune Outsourcing is one of the Malaysia’s Most Advanced and Top Outsourced Accounting, Finance, HR and Payroll services providers.

We have served more than 400 clients todate and InTune offer full-range services from start up to small to medium-sized companies.

InTune takes away the stress and pains from managing Accounting, Finance, Payroll and HR, including Bookkeeping, Payment Services, Accounts Payable, Accounts Receivable, Payroll and more, by providing an expert team of CPAs and other accounting professionals who understand the special accounting needs of growing businesses