KUALA LUMPUR: Datuk Seri Fadillah Yusof stated that the Cabinet is willing to consider exempting water and electricity from the planned sales and service tax (SST) hike. “Definitely, for some areas, the government will have a look at it,” the Deputy Prime Minister told a press conference on Wednesday (Feb 28).
Although no decision has been made yet, Fadillah, who is also the Energy Transition and Water Transformation Minister, explained that they are looking into who would be entitled to an exemption. “Because otherwise (the revenue collected) goes back to the people,” he added.
While the matter is not on the agenda for the next Cabinet meeting, the Finance Ministry is examining the overall situation. Starting from Friday (March 1), the SST rate for most services, including overseas-based digital services, will increase from 6% to 8%.
Moreover, services like karaoke outlets, delivery, brokerage and underwriting services, which were previously untaxed, will now be subjected to the new rate of 8%. On Tuesday (Feb 27), MCA President Datuk Seri Dr Wee Ka Siong reiterated his call for water and electricity charges to be exempted from the planned hike.
In a Facebook video, Dr. Wee questioned why water and electricity, which are basic needs, were not being considered for exemption like the food and beverage, parking, and telecommunications sectors. Domestic Trade and Cost of Living Minister Datuk Armizan Mohd Ali mentioned on the same day that the ministry had conducted a study on the implications of the SST increase.
He revealed that the findings would be presented to the National Action Council on Cost of Living (Naccol) on March 20 and suggested that utility charges could potentially be exempted. It is clear that there is growing pressure for water and electricity to be excluded from the SST hike as discussions within the government continue.
