No SST for water, electricity usage over 600kWH/month gets 8%

PETALING JAYA: The Government has confirmed that water bills will remain exempted from the sale and service tax (SST).

Meanwhile, an 8% SST will be charged on electricity usage of more than 600kWH per month, effective March 1, 2024.

According to the Finance Ministry, the new tax imposed is expected to affect about 15% of domestic electricity users.

“For electricity, the SST is only applicable for usage above 600kWh. Almost 85% of users fall below this threshold and therefore will not be affected,” the ministry said in a statement on Wednesday (Feb 28).

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The service tax does not apply to treated water, it added.

Effective March 1, SST in Malaysia will be revised to 8% from 6%.

The change, which is expected to generate an additional revenue of RM3bil for the government, is part of the government’s tax reforms aimed at strengthening the country’s fiscal foundation, bringing the economy back on track.