KUALA LUMPUR: The Master Builders Association Malaysia (MBAM) today said that the service tax increase and widened scope poses a significant threat to the construction sector and its stakeholders.
The service tax rate now stands at 8 per cent, while logistics services will carry a 6 per cent service tax from April 1, 2024.
"The added financial burden on consumers will inevitably result in an upsurge in the cost of goods, affecting the affordability and accessibility of construction materials," MBAM president Oliver HC Wee said.
He mentioned that MBAM members are concerned that the increase in taxes could hinder economic growth.
Wee emphasised that the construction industry is essential to Malaysia's economy, serving as a crucial contributor to job creation and infrastructure development.
"Any hindrance to its progress will have far-reaching consequences on employment rates and national prosperity," he added.
MBAM has urged the government to extend tax exemptions to intragroup services in logistics and maintenance and repair services, and not only for the same taxable services within logistic services.
Wee urged the government to include Business to Business (B2B) exemption for maintenance and repair services, which are currently not eligible, to prevent multiple taxation layers on identical products and services.
"If the government can consider accepting our appeal, this will help to assist our members and the construction industry to get some much needed relief with the current service tax increases," he concluded.
