Meanwhile, the service tax will be expanded to include rent, lease, construction, financial services, private healthcare and education.

“This expansion however will come with some exemptions to avoid double taxation and ensure that Malaysians are not taxed for certain services,” finance minister II Amir Hamzah Azizan said in a statement.

In November, Amir said the expansion of the sales and service tax (SST) was expected to generate RM51.7 billion in revenue in 2025.

This would represent an additional revenue of RM5 billion over the current SST collection forecast of RM46.7 billion.

Amir, this evening, said the review of the SST was done after engaging the stakeholders, including the associations of relevant industries and tax agents.

He added that their input and feedback were taken into account to cushion the impact the policy would have on the industries and to ensure it would not affect the majority of the people.

“The government is committed to pushing for economic reforms.

“To ensure that the people are not impacted by the review of the SST, the government will adopt a targeted approach to make sure essential goods and services are not taxed.”