KUALA LUMPUR, March 7 – The government is expected to collect additional revenue amounting to RM3.45 billion from the expansion of the scope of service tax and the increase in the service tax from six per cent to eight per cent, according to the Finance Ministry.
The ministry said this in a written reply posted on the Parliament website in response to a question from Ahmad Fadhli Shaari (PN-Pasir Mas) regarding the increase in national revenue when the new service tax rate comes into effect on March 1.
The government has announced in Budget 2024 an increase in service tax excluding services such as food and beverages, telecommunication services and vehicle parking space provision services.
The government also announced the expansion of the scope of service tax to include logistics services, brokerage, guarantee sponsors and karaoke.
In the meantime, the ministry said the federal government’s revenue in 2024 is projected to increase to RM312.159 billion after taking into account the tax measures of Budget 2024, contributed by higher tax revenue collection and better economic growth.
According to the ministry, tax revenue remains the main contributor to the federal government’s revenue which is 79.5 per cent of the total revenue, equivalent to 12.57 per cent of the Gross Domestic Product (GDP) rate.
The amount also covers non-tax revenue representing 20.5 per cent which is equivalent to 3.24 per cent of GDP.
