2024 Budget: 2% rise in Service Tax; extending tax net; new Luxury Tax
Malaysia’s 2024 Budget, presented to the parliament on 13 October 2023, includes a 2% rise in the Service Tax from 6% to 8%. Certain essential supplies will remain at 6% and a new Luxury Tax will be implemented.
Service Tax is a turnover tax on the supply of and services, including digital services. There is also a Sales Tax of 5% or 10% on turnover for the sale of goods.
Sales and Service Taxes were reintroduced in Malaysia after the country briefly operated a Goods & Services Tax between April 2015 and July 2018. The Malaysian is said to be considering reintroducing GST.
Food, beverages, car parks and telecommunications will be excluded from the rise, and therefore remain at 6%.
The Service Tax net will be extended to: logistics services (6%), brokerage and underwriting services as well as karaoke outlets
A new Luxury Tax will be introduced on the sales of jewellery and watches.