SIBU: Sarawak United People’s Party (SUPP) Central Youth Chief Councillor Kevin Lau Kor Jie has urged the federal government to postpone the implementation of the revised service tax on financial services, saying a rushed rollout may cause confusion and burden local businesses.
He pointed out that while basic banking services may remain unaffected, there is still a lack of clarity on which specific services will be taxed, causing concern among the public and business owners.
“It was just announced recently, and there are only a few days left before July 1. Many businesses may not be prepared,” he said in a statement today.
Lau noted that businesses, particularly micro, small and medium enterprises (MSMEs), are still grappling with inflation and economic uncertainties, and the tax expansion could worsen their challenges.
“Businesses are already having a tough time due to inflation. The expansion of SST to include financial services would burden them further,” he stressed.
He added that the inclusion of leasing services, such as rentals of offices, shops and warehouses, would increase operating costs and reduce competitiveness for MSMEs.
Lau proposed that authorities release a comprehensive list of financial services that will be taxed to prevent unnecessary misunderstandings or misinterpretations.
He also called on the government to explore more effective ways to stimulate the domestic economy and support local businesses rather than introducing measures that may discourage spending.
“With prices rising and consumers being more cautious, the government should focus on encouraging local consumption and business recovery,” he said.
Lau, who is also SUPP Bawang Assan chairman, backed the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM)’s suggestion to delay the implementation until early next year.
The Association of Banks in Malaysia (ABM), Association of Islamic Banking and Financial Institutions Malaysia (AIBIM), and the Malaysian Investment Banking Association (MIBA) recently clarified that financial services involving fees and commissions will be taxed at eight per cent, while basic services like savings accounts and e-wallets will not be affected.
In response to public concerns over rising fruit prices, Lau welcomed Prime Minister Datuk Seri Anwar Ibrahim’s decision to exempt imported fruits such as apples and oranges from SST, and urged that mandarin oranges also be included, citing their cultural importance during the Chinese New Year.
