KUALA LUMPUR: As Malaysians continue to struggle with the rising cost of living, the federal government has quietly gazetted two new Sales Tax Orders on June 9 that will come into effect starting July 1, 2025—bringing with them a massive expansion in taxable goods, including daily essentials.
The two Orders, namely the Sales Tax (Rates of Tax) Order 2025 [P.U.(A) 170/2025] and the Goods Exempted From Tax Order 2025 [P.U.(A) 171/2025], replace the previous versions that have been in effect since 2022. However, a comparison between the old and new versions reveals a shocking shift, with a drastic increase in the number of goods now subject to tax and a significant reduction in those that are exempted.
Facebook user Anass Soffy Abdul Wahid highlighted the matter in a detailed post, comparing both official documents. He pointed out that the list of taxable items has grown from 62 pages in 2022 to 222 pages in 2025. In terms of 10-digit HS Code subcategories, the number has surged from 987 to 4,104 — a fourfold increase.
At the same time, the list of tax-exempt goods has shrunk from 282 pages to just 103, with the number of exempted subcategories dropping from 5,222 to only 1,813.
“This is not just cosmetic revision. It’s a massive expansion of the sales tax that now covers almost every category of daily essential goods that previously were tax-free,” Anass wrote.
He also slammed the official statement by the Ministry of Finance claiming that only items like salmon, tuna, and avocados would be taxed, calling it misleading. In reality, thousands of everyday items — including local fruits, vegetables, seafood, canned foods, spices, sauces, chocolate, drinks, snacks, and processed foods — are now listed as taxable under the new Order.
“For example, almost all fruits are now taxed. Even mangoes, pineapples, starfruit, rambutans, and salak are included. They were never taxed before,” he added.
Anass noted that this wide expansion proves the government’s projected RM10 billion in additional revenue doesn’t come from taxing luxury goods but from ordinary Malaysians who buy their groceries at the market.
“If a can of pineapples used to cost RM3, it may now be RM3.30 or RM3.50. It may seem small, but when every item increases, it’s no longer normal inflation — it’s a systemic squeeze on household spending.”
What’s more troubling, he said, is that the government made this decision without public discussion, without a proper explanation in Parliament, and simply slipped it into the Gazette — as if hoping the public wouldn’t notice.
“Taxation is public policy. When the government expands the scope of tax quietly and hopes people don’t realise, that’s not just lacking transparency — it’s unethical,” Anass stressed.
The move also calls into question the government’s sincerity in helping Malaysians cope with inflation. While the public awaits concrete solutions to skyrocketing prices, the government has chosen the easy route of taxing previously untaxed goods — a move that will inevitably drive up retail prices.
“This isn’t progressive fiscal reform. This is regressive taxation that burdens the lower-income groups,” Anass concluded.
His observations have begun circulating widely on social media, sparking concerns among consumers, traders, and economists alike — raising the question: who exactly will bear the cost of the RM10 billion revenue gain?
HARAKAHDAILY 11/6/2025
