SST Hike: What's Getting More Expensive in Malaysia from March 1st?

Malaysia Announces SST Increase: PM Delivers Budget Speech (2024)

Following Budget 2024 Tabling (Pembentangan Belanjawan 2024) last year, starting 1 March, Malaysia's sales and service tax (SST) rate will increase by 2%, rising from the previous rate of 6% to the new rate of 8%. The increase in SST will lead to higher costs for consumers on taxable services such as electricity and streaming platforms.

So, what new services will be subject to service tax?
  • Karaoke centre services
  • Brokerage and underwriting services for non-financial services such as ship/aircraft brokerage, commodities, and real estate
  • Logistics services, and
  • Maintenance or repair services
However, the following services will not be subject to the new tax rate and remain at 6%.
  • Food or beverage preparation services
  • Telecommunication services (phone bills and Internet bills)
  • Vehicle parking space provision services, and
  • Logistics services
Check out the table below to see what's changed:

SST Increase Impact: See How Everyday Costs Change (March 1st, 2024)
(Source: MY SST)

Additionally, platforms like Shopee have also announced an SST increase for their services. As a busy mom who relies on online shopping to save time and sometimes money, this SST increase across platforms like Shopee stings a bit. I understand the need for the tax, but it definitely adds another layer to the rising costs we're already facing. It looks like we'll have to be even more vigilant with our online shopping habits, yes?🥲 

Shopee fee breakdown (before & after 8% SST):

Shopee Fee Breakdown: Before & After 8% SST
(Source: Shopee)

Car prices may also increase
This year (or maybe next year), I’m considering buying a new car (boys are growing out of the car faster than it can handle them), I read that the 2% increase in the sales tax (SST) might raise car prices. While car companies like Sime Darby expect the impact to be manageable, it seems prices will likely go up slightly starting March 1st. This is because the tax applies to everyone in the industry, but other factors like overall demand will also play a role in the final price.

Your electricity bill will also be affected if it exceeds RM220 a month
Thankfully, my electricity bill usually stays below RM220, so I won't be affected by the new 8% service tax on electricity starting March 1st. This tax only applies to users exceeding 600kWh of monthly usage, which translates roughly to bills above RM220. While the new tax will impact about 15% of Malaysians, it's good to know the majority, including myself, won't see a change in their electricity bills.

Netflix, Steam, and 5 Other Digital Services and other digital services
Our favorite streaming services like Netflix and Steam might be getting a bit more expensive soon. Starting March 1st, the Malaysian government is raising the tax on digital services from 6% to 8%. This means I can expect to see slightly higher prices for subscriptions to Netflix, Disney+, Hotstar, Viu, Steam, Playstation Network, and PC Game Pass. While it's not a huge jump, it's good to be aware of the change before my next bill comes.

Hotel Prices Expected to Increase Up To 30%
Guess what? Our travel plans might get a bit more expensive this year. Hotel prices in Malaysia are expected to rise by 10% to 30% starting March 1st due to the increase in Sales and Service Tax (SST) from 6% to 8%. While some, like the Malaysian Association of Hotels (MAH), believe the price hike won't significantly impact tourism, others, like individual hotel owners, are concerned about the domino effect on costs and may raise prices even more. This could make staycations and vacations a bit pricier, so it's worth considering while planning our next trip.

So, there you have it, a little rundown on the price changes we can expect starting today. While some things, like my electricity bill, are staying the same, others like online shopping and streaming services might see a slight bump. And if you've been dreaming of a staycation, get ready to factor in potentially higher hotel costs.

Not the easiest, but we're up for the challenge, right? Maybe we can find creative ways to save here and there or use this as an opportunity to explore new, budget-friendly activities and destinations. After all, sometimes the best adventures are unplanned.