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New Government Takes a Stand: Service Tax on Delivery Services on Hold

Updated: Mar 12

The Malaysian government has further postponed implementing a service tax on goods delivery services until a later date to be announced.

Initially proposed in Budget 2022, the tax excludes food and beverage delivery and logistics services.

The Royal Malaysian Customs Department deferred the tax until 1 January 2023, but the Prime Minister and Finance Minister, Datuk Seri Anwar Ibrahim, has now decided to delay its implementation again.

The service tax, currently set at 6% for all taxable services, is only imposed on courier delivery services for documents or parcels under 30kg.

There are still uncertainties surrounding the definitions and details of the expanded tax coverage, and businesses may need more time to seek further clarity. The delay will give the authorities more time to fine-tune the details and address the pressures of the current economic and business environment.