KUALA LUMPUR: Business-to-business logistics service providers will be exempt from the six per cent service tax when procuring logistic services which is part of its scope of service, the government said today.
As announced during the 2024 Budget, logistics services will be imposed a 6 per cent service tax from Mar 1, 2024.
MoF said following feedback from 25 engagement sessions with stakeholders before the service tax was imposed, exemptions were given for logistics services for directly exported goods, transshipment, transit, door-to-door, and food and beverage deliveries using online platforms.
In a statement, the Finance Ministry (MoF) said the expansion of tax exemption scope will mean that a freight service provider is not only exempted from being taxed on freight services but also other services such as shipping, warehousing, port and cold chain facilities, which is part of its scope of service.
Finance Minister II Datuk Seri Amir Hamzah Azizan in his winding up speech at Dewan Rakyat today said the ministry will widen the scope of service tax exemptions for the logistics sector to reduce the impact of double taxation.
"Based on the feedback and views that have been submitted by various parties including members of parliament, the government agreed that the scope of the exemption of B2B logistics services is extended to cover the provision of services under the same details.
"This is to reduce the incidence of double taxation or cascading effect from the imposition of taxes on taxes for several layers of the supply chain logistics," the MoF said in its statement.
"The ministry will continue to hold engagement sessions with the industry especially from the logistics sector to finalise amendments to the guidelines to enable its enforcement. "In addition, the government understands the need for industry players to have ample time to make the amendments. As such, newly registered logistics service providers are given a period of one month for the setup and will only charge six per cent service tax from April 1," it added.