MOF announces service tax exemptions for more logistics, maintenance services [BTTV]

KUALA LUMPUR: The Ministry of Finance (MoF) has announced a widening of the scope of logistics and maintenance services that will be given service tax exemptions to ease cost of living pressures.

Finance Minister II Datuk Seri Amir Hamzah Azizan said the exemptions, particularly for the logistics sector and maintenance services, are part of the government's efforts to mitigate the tax's effect on the cost of living while maintaining the competitiveness of the nation's services sector.

"To further preserve the country's competitiveness, the government will also not impose service tax in free zones," Amir Hamzah said in a statement.

Logistics management service supply chain, airport and port service operators, warehousing services, freight forwarders, shipping, aviation, or cold chain services will no longer incur service tax for acquiring delivery or distribution or transporting goods' services, according to the statements issued by MoF today.

Free commercial zones and free industrial zones such as the Port Klang Free Zone and West Port in Selangor, as well as the Pasir Gudang Port in Johor, are also exempted from service tax.

"In addition, there is also an exemption for ocean freight charges for all goods delivered by sea mode, limited to Peninsular Malaysia to Sabah/Sarawak/Labuan; Sabah/Sarawak/Labuan to Peninsular Malaysia; and between Sabah, Sarawak, and Labuan," it said.

Meanwhile, the government has also agreed to service tax exemptions for maintenance services for repairs of residential buildings; sinking funds; and maintenance services related to land or buildings for residential purposes provided by developers, joint management bodies, or resident associations.

With this, MoF said all maintenance and repair services at residential premises such as roof upgrades or for any item and fixture attached to or part of the residential premise's structure such as lifts, air conditioners, and water heaters are not subject to service tax.

It said the service tax rate's increase from 6 per cent to 8 per cent that came into effect on March 1, 2024 is concentrated on services that are discretionary in nature and business-to-business activities that do not directly impact the rakyat.

"The increase does not involve key essential services that are part and parcel of the rakyat's lifestyle such as food and beverage, telecommunications, and vehicle parking," it added.


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