Malaysians fret over expansion of sales and services tax from July

They are concerned latest economic measure would feed inflation, curb sales

- Lu Wei Hoong

SUBANG, Selangor — Avocados from Australia, salmon from Norway, king crabs from Alaska, and mangoes from Thailand have become hot potatoes in Malaysian politics.

Prime Minister Anwar Ibrahim is expanding the list of imported foods that will be taxed from July 1 in an effort to boost government coffers, but is facing howls of protest from Malaysians concerned that the move would feed inflation and curb sales.

"Some 70 per cent of our stock is imported, with strawberries and apples from Korea, for example," said Ms Jennifer Choo, 20, who was manning the cashier counter at Soon Seng Ever Fresh Fruits owned by her parents.

"Customers expect prices to go up by RM1 (30 Singapore cents) to RM2 per fruit," she told The Straits Times on June 15. The shop in Selangor state's Subang township currently sells 250g of strawberries from the US for RM19.80, while five South Korean apples go for RM12.

The government announced on June 9 that it will expand the list of imported fruits and "premium seafood" that will be taxed by 5 per cent. These are now tax-free.

In March 2024, Malaysia's sales and services tax (SST) was revised from 6 per cent to 8 per cent.

The widening of the SST in July 2025 will also include a wide range of businesses like the leasing or rental of premises, construction, financial services, private health-care and beauty services.

The expansion of the SST is just the latest controversial move by the government on the economic front: It plans to "slightly increase" electricity tariffs for the industrial sector on July 1.

In addition, it is going ahead with reducing subsidies for the widely used RON 95 petrol by the end of 2025.

The government is also mulling over whether to stop commercial eateries from using subsidised cooking gas, a scheme that would jack up the cost of eating out.