A total of 1,826 items are exempted or zero-rated under the sales and service tax (SST) after its scope was expanded on July 1, says the finance ministry.
In a written parliamentary reply, the ministry said this was significantly higher than the 607 items exempted under the goods and services tax (GST) before it was abolished in 2018.
The exemptions cover basic necessities and widely used goods, including raw or unprocessed food such as chicken, beef, goat, fish, vegetables, local fruits and rice.
Processed food items such as flour, sugar, salt, white bread, milk and palm cooking oil are also exempted, along with medicines, medical devices and reading materials.
“SST also exempts livestock and pet food, basic construction materials, fertilisers, pesticides, and agricultural and livestock machinery,” the finance ministry said.
The reply came in response to R Yuneswaran (PH–Segamat), who asked about the total number and categories of items exempted under SST in 2025 compared with GST.
The finance ministry added that service tax applies to 70% of services in the economy, compared with 76% under GST.
Exempted services include school buses, express buses, LRT, trains, ferries, rural air services in Sabah and Sarawak, and prepaid telecommunication services.
The ministry said the government is implementing the SST expansion carefully and progressively, taking into account the impact on the cost of living.
“The government also provides practical and comprehensive measures to reduce the effects of double taxation and the cost of living while promoting sustainable economic growth.
“The larger number of exempted goods and narrower scope of services under SST compared with GST shows the government’s concern for citizens’ welfare and ensures stronger fiscal sustainability, in line with the core principles of the Madani economic framework,” he said.
The SST expansion is expected to increase revenue by RM5 billion in 2025 and RM10 billion in 2026.
