KUALA LUMPUR (June 27): The Small and Medium Enterprises Association Malaysia (Samenta) has welcomed the Ministry of Finance’s (MOF) revision to the expanded sales and service tax (SST), describing it as a meaningful relief for the small and medium enterprises (SMEs).

Its president, Datuk William Ng, said the revision includes a higher annual sales threshold for service tax on rental and financial services, which effectively exempts approximately 75% of SMEs from the additional 8% under the expanded SST.

“When the expansion of the SST was first announced, Samenta was among the first to voice concerns, particularly over its potential impact on our SMEs.

“We urged the government to raise the SST threshold — a move that would protect smaller enterprises while still allowing for a broader and fairer tax base,” he said in a statement on Friday.

The MOF announced on Friday that, after carefully considering public sentiment, it has decided not to proceed with the proposed expansion of the service tax to beauty services, including manicures and pedicures, facial services, and services provided by barbers and hairdressers.

The MOF stated that all revisions to the expanded SST were made after considering feedback from the public and industry.

Ng said the association expressed gratitude to Prime Minister Datuk Seri Anwar Ibrahim for hearing their concerns and directing the ministry to revise the threshold upwards.

“While we will continue to advocate for a balanced and SME-friendly approach in future tax reforms, we consider this matter concluded and will not seek further concessions on the SST expansion,” he added.

He also encouraged affected SMEs to take the necessary steps to implement the expanded SST and to seek assistance from the Royal Malaysian Customs Department where needed.

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SST revision: Beauty services excluded, threshold for leasing, financial services raised to RM1 mil

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