KUCHING: As Malaysia prepares to implement the expanded Sales and Service Tax (SST) and mandatory e-invoicing for businesses with annual turnovers between RM5 million and RM25 million starting July 1, Political Secretary to the Premier of Sarawak, Kho Teck Wan, has raised concerns over the federal government’s last-minute policy changes.
Kho said she welcomed the exemption of e-invoicing for businesses earning below RM500,000 annually, but noted that the announcement came too late to benefit many small and medium enterprises (SMEs).
“Most SMEs had already made the necessary changes, spent money on trainings and purchased software in preparation for the e-invoice implementation. Now that the policy has suddenly changed, their investments have gone to waste. Their frustration and helplessness are understandable,” she said.
Kho criticised the timing of the policy shift, stating that it reflected insufficient preparation and consultation by the federal government. She called for more comprehensive studies and meaningful engagement with stakeholders before rolling out any future policies, to prevent the public from bearing unnecessary financial burdens caused by policy uncertainty.
She also welcomed the recent decision to exempt certain imported fruits such as apples, oranges, mandarin oranges, and dates from the sales tax. While she thanked those who lobbied for the exemption, she expressed concern over the short notice of the announcement.
“When decisions are made so close to the implementation date, it creates confusion not only for consumers and business owners but also for enforcement officers. I hope this exemption remains unchanged,” she added.
Kho further pointed out that from July 1, banks will begin charging 8 percent service tax on selected fees and commission-based financial services. This will be followed by a second phase of taxation beginning September 1, which will extend to additional financial services.
Although the Finance Ministry has assured that basic banking services for current and savings accounts will remain exempted, she warned that the new tax measures will still increase the cost of doing business. She said these rising costs are likely to be passed on to consumers, resulting in another wave of price hikes in the market.
While acknowledging that the expanded SST will help boost national revenue, Kho urged the federal government to place greater emphasis on growing the economy through foreign investment, job creation, and export opportunities rather than relying heavily on taxation of the public.
By Connie Chieng