KUALA LUMPUR (Nov 12): The government expects to raise an additional RM5 billion in revenue by expanding the scope of the sales and service tax (SST), which is set to roll out on May 1 next year, said Finance Minister II Datuk Seri Amir Hamzah Azizan.

With the expanded SST scope, revenue is projected to reach RM51.7 billion, up from the current forecast of RM46.7 billion for 2025, Amir noted.

"The additional RM5 billion in revenue will be sufficient to meet government needs without placing a burden on lower-income groups," said Amir during his winding-up speech for Budget 2025 at the Dewan Rakyat on Tuesday.

When tabling Budget 2025 earlier in October, Prime Minister Datuk Seri Anwar Ibrahim announced that the sales tax would apply to non-essential goods, particularly imported premium products such as salmon and avocados.

Additionally, the scope of the service tax will be extended to include certain commercial services, especially those operating on a fee-based model.

In his winding-up speech, Amir said that engagement sessions with stakeholders and relevant industries are ongoing to finalise the scope of the expansion and the applicable tax rates.

Nevertheless, he reiterated that the expanded SST will be implemented progressively and will apply only to specific goods and services to avoid undue burdens on the public.

"All essential food items consumed by the public will be exempt from sales tax. Meanwhile, the expanded service tax will only cover business-to-business (B2B) services, such as fee-based financial services provided by financial institutions to businesses, not to individuals," Amir noted.

Amir added that a portion of the revenue collected from the expanded SST will be directed towards enhancing cash assistance for the public.

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