Kho Teck Wan Urges Federal Government Not To Change Policies At Last Minute

suppadmin | June 30, 2025

As Malaysia braces for the implementation of the expanded Sales and Service Tax (SST) and mandatory e-invoicing for businesses with an annual turnover between RM5 million and RM25 million starting July 1, concerns have been raised over the last-minute changes in federal policy.

Political Secretary to the Premier of Sarawak, Kho Teck Wan, expressed her mixed reaction to the upcoming changes, particularly in relation to the exemption from mandatory e-invoicing for businesses earning below RM500,000 annually. While she welcomed the exemption, Kho noted that the timing of the announcement had left many small and medium enterprises (SMEs) frustrated.

“Most SMEs had already made the necessary changes, spent money on trainings and purchased software in preparation for the e-invoice implementation. Now that the policy has suddenly changed, their investments have gone to waste. Their frustration and helplessness are understandable,” she said.

Kho criticised the last-minute changes, stating that it revealed a lack of thorough study by the federal government on the real-world implications of the SST expansion. She urged Putrajaya to conduct more comprehensive assessments and engage stakeholders before rolling out new policies, so as to avoid unnecessary burdens on the public and business community.

She also welcomed the government’s recent decision to exempt imported fruits such as apples, oranges, mandarin oranges, and dates from the sales tax. She expressed appreciation to the parties involved in lobbying for the exemptions, but hoped the decision would remain firm. “Announcing such changes just days before implementation creates uncertainty for consumers, businesses, and even enforcement officers,” she said.

Kho further highlighted that from July 1, banks in Malaysia will begin charging an 8 percent service tax on selected fees and commission-based financial services, with a second phase of the tax to be implemented on September 1. She acknowledged the Finance Ministry’s assurance that basic banking services will remain exempted, but said the new tax will still increase the cost of doing business.

“The rising costs will eventually be passed on to consumers. A further price hike in the market is almost inevitable,” she said.

While acknowledging that the expanded SST will contribute to increasing government revenue, Kho urged the federal government to focus more on generating national income through foreign investment, job creation, and export growth rather than relying heavily on taxation of the public.