PETALING JAYA: The government’s decision to increase the digital service tax (DST) will further burden consumers, says Datuk Seri Dr Wee Ka Siong (pic).
“It will increase by two percentage points from 6% to 8% starting March 1, on top of a slew of taxes people are going to face in the coming months,” the MCA president said in a Facebook post yesterday.
He noted that DST was introduced on Jan 1, 2020 during the Pakatan Harapan administration.
Some merchants took advantage by raising prices, he added.
“So I expect an increase in prices for digital services this time, which will go up not just by two percentage points but much higher, as the merchants will use the increase as an excuse to inflate prices.
“Ultimately, who will bear it? The consumers,” he said.
Dr Wee said water tariffs have already gone up by 22% after a recent hike in electricity bills, with new levies like low-value and high-value goods taxes to be enforced this year.
StarPicks
Seize the opportunity to set up your future
“The increase in the sales and service tax (SST) from 6% to 8% and the expansion of SST’s scope will definitely happen simultaneously,” he noted.
He added that the people were already worried about the withdrawal of subsidies by the government.
“Will consumers even have any breathing space in (this) challenging situation?
“This is my concern,” he added.
It was reported in The Star that come March, Malaysians will pay more for daily living, including for pursuits often engaged in during weekends.
Everything from leisure activities and outings to consulting a traditional or complementary medicine practitioner is expected to cost more with the service tax rate hiked to 8% from 6%.
The only exemptions are food and beverage, telecommunications and vehicle parking services.
Karaoke outlets and delivery services will be taxed 8%, along with brokerage and underwriting services.
Logistics services, which were not taxed previously, will also become taxable in March but at a rate of 6%.
According to a notice on the Customs Department website, the DST for overseas-based digital services will also see a two percentage points increase to 8%.
The raised service tax comes in the wake of the low-value goods tax, which started earlier this month.
It covers all imported low-value goods priced at RM500 and below purchased online.
The high-value goods tax is slated to start in May at a rate of between 5% and 10%.
It is expected to be imposed on big-ticket items such as private jets and yachts, jewellery, luxury timepieces and luxury cars.
From Feb 1, the price of treated water supplied to households will go up by 22 sen per cubic metre (1,000 litres) in Peninsular Malaysia and the Federal Territory of Labuan.