KUALA LUMPUR: The expansion of the Sales and Service Tax (SST) beginning next year is estimated to generate revenue of RM51.7 billion, said Finance Minister II Datuk Seri Dr Amir Hamzah Azizan.
The amount, he said, is an additional RM5 billion compared to the projected SST collection of RM46.7 billion for 2025 under the current taxation system.
"Of the additional RM5 billion, RM2.2 billion will come from Sales Tax collection, while RM2.8 billion will come from Service Tax collection.
"This additional revenue is sufficient to meet the government's current needs while ensuring that low-income citizens are not burdened," he said in his winding-up of the 2025 Budget in the Dewan Rakyat here today.
Amir Hamzah said the SST would be implemented more progressively and would not burden the public, particularly those in the low-income group.
He added that the SST expansion focuses on taxing specific goods and services, ensuring that food and essential services remain untaxed under the SST.
"Sales tax will not be applied to essential goods used by the public. Instead, it will be imposed on non-essential items such as imported premium goods.
"The scope of the service tax will be expanded to cover commercial service supplies between businesses, or business-to-business (B2B) services, which are currently not taxed.
"For instance, service tax will be imposed on fee-based financial services provided by financial institutions, such as investment banks, to businesses rather than to individuals," he said.