Tuesday, 15 July 2025

SMEs hit by last-minute policy changes

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Kho

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KUCHING: Small and medium enterprises (SMEs) are bearing the brunt of last-minute changes to the expanded Sales and Service Tax (SST) and mandatory e-invoicing policies set to take effect today (July 1), said Kho Teck Wan, SUPP Women Chief and Political Secretary to the Sarawak Premier.

Kho welcomed the recent exemption for businesses with annual turnovers below RM500,000 from e-invoicing requirements but pointed out that the announcement came too late.

“Many SMEs had already spent money on training and software in preparation for the new rules.

“Now that the policy has changed, these investments have gone to waste, leaving business owners understandably frustrated and helpless,” she said.

She stressed that while the exemptions on imported fruits such as apples, oranges, mandarin oranges, and dates are good news for consumers, the government’s last-minute decisions highlight an apparent lack of thorough impact studies on the SST rollout.

“Such abrupt changes indicate insufficient analysis by the MADANI government and risk imposing unnecessary financial burdens on the public,” Kho said.

Kho urged the federal government to conduct comprehensive studies and engage stakeholders ahead of future policy rollouts to avoid causing confusion and economic losses.

On the upcoming tax on financial services, Kho noted that starting today (July 1), Malaysian banks will impose an 8 per cent service tax on selected fees and commission-based financial services, with the tax expanding further by September 1.

“While basic banking services such as current and savings accounts will remain exempted, the increased costs will inevitably be passed on to consumers, leading to price hikes for end products and services,” Kho said.

Kho concluded by calling on the federal government to focus more on strengthening the nation’s coffers through foreign investments, job creation, and export opportunities, rather than burdening the public with higher taxes.

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