Kuala lumpur: The collection of Sales and Services Tax (SST) on imported fruits is projected to generate an additional revenue of RM38 million annually starting from 2026, said the Ministry of Finance (MOF).

According to BERNAMA News Agency, the review of sales tax rates and the expansion of SST, effective from July 1, 2025, are expected to generate an additional RM10 billion in revenue annually beginning in 2026.

The ministry stated that the SST rate review was implemented to strengthen the country's fiscal position while promoting and supporting the local fruit industry. However, the government has taken public feedback into account and revised the rates to exempt selected imported fruits such as apples, oranges, dates, and mandarin oranges. This decision was made to ensure guaranteed access to nutritious and commonly consumed foods, especially for vulnerable groups, as mentioned in a written response on the Parliament's website.

In response to inquiries from Jimmy Puah Wee Tse (PH-Tebrau) regarding the expected revenue collection from the SST expansion, the MOF noted that the expansion is targeted and includes certain facilities and exemptions as mitigation measures to ensure that the tax burden is fairly distributed and borne only by those capable. Meanwhile, in a separate response, the ministry clarified that the government currently has no plans to implement the Goods and Services Tax (GST) because the general income level of the population is still too low for a broad-based GST.

The ministry highlighted that the implementation of SST can provide a faster fiscal impact to the government compared to reintroducing GST, which requires a longer preparation period of up to two years. Additionally, SST is viewed as more progressive due to its targeted structure, where goods and services commonly used by the majority of the population are generally not taxed.

In response to Datuk Seri Dr Wee Ka Siong (BN-Ayer Hitam), who queried why the government has not reintroduced GST, the MOF explained that after the sales tax rate review, the number of exempted or zero-rated items will total 1,826 goods, which is higher than the 607 zero-rated items under GST before it was abolished in 2018. The expansion of the service tax scope involves taxing 70 per cent of the services listed under the Malaysia Standard Industrial Classification (MSIC) codes, compared to 76 per cent of the scope of services taxed under GST.

The MOF elaborated that the greater number of exempted goods and the lower percentage of services taxed under SST compared to GST demonstrate the government's concern for the well-being of the people while ensuring stronger fiscal sustainability aligned with the core principles of the MADANI Economic Framework.