MONEY MASTER

The government will keep the  Sales and Services Tax (SST)  revenue threshold for construction services at  RM1.5 million , rejecting industry appeals to raise it to RM3 million, Deputy Works Minister  Datuk Seri Ahmad Maslan  told the Dewan Rakyat. Ahmad said the current threshold is  “appropriate” , ensuring that  small-scale contractors with project values below RM1.5 million remain unaffected . He added that the government had communicated the July 1 implementation timeline early to allow industry players to prepare. “There has been no discussion to raise the threshold, and I do not foresee it happening. At this point, the RM1.5 million threshold is sufficient,” Ahmad said. Under the revised policy, a  6% SST  applies to construction service providers whose taxable revenue exceeds RM1.5 million within any 12-month period. Exemptions include residential buildings, public amenities within residential developments, religious facilities, publ...

Sector Outlook: OVERWEIGHT Hong Leong Investment Bank (HLIB) maintains an  OVERWEIGHT  rating on Malaysia’s consumer sector, citing supportive macroeconomic fundamentals and easing cost pressures that are expected to drive  earnings recovery in 2H25 , despite the expanded Sales and Service Tax (SST). Key Calls and Target Prices Stock Call Target Price (RM) 99SMART (5326) BUY 2.98 AEON (6599) BUY 1.82 FOCUSP (0157) BUY 1.10 NESTLE (4707) HOLD 78.00 ORIENT (4006) HOLD 0.76 BJFOOD (5196) SELL 0.21 PWROOT (7237) SELL 10.77 Why the Optimism? 1. Cost Relief on Commodities Prices for  sugar, wheat, coffee, and palm oil  have stabilized or declined. Companies like  Nestle  and  Mr DIY  have already recorded margin improvements from lower input and inventory costs. The strengthening  Ringgit (target RM4.10/USD by year-end)  enhances import efficiency, especially for retailers. 2. Labour Market & Fiscal Support Unemployment remains low ...

With trade uncertainty looming and growth indicators turning cautious,  expectations are rising  that  Bank Negara Malaysia (BNM)  may  cut interest rates  as early as  next week’s July 9 policy meeting  — the same day US President Trump’s tariff deadline hits. What’s Driving the Rate Cut Expectations? Domestic Demand at Risk : HSBC sees early signs of softening household consumption, particularly with  subsidy rationalisation  and  SST (sales & service tax) expansion  dampening sentiment. Exports Contracting : Malaysia’s  May exports shrank by 1.1% , a sign of weakening global demand and lingering tariff risk. No clear breakthrough in US-Malaysia trade talks has been announced yet. Slowing Credit Momentum : CIMB flags  broad-based weakness in private-sector borrowing , hinting that businesses and households are growing cautious. Revised Growth Outlook : The government is  preparing to downgrade  its cur...

  Key Points: Government open to factual feedback on tax and tariff measures. SST expansion and electricity tariff adjustments target higher-income segments. Authorities willing to fine-tune policies, especially to shield essential sectors like education. Money Master Insight: Watch:  Domestic sectors with thin margins (consumer staples, services) could face short-term earnings pressure. Opportunities:  Export-oriented, commodity, and tech sectors likely more resilient. Policy Path:  Expect targeted tweaks rather than sweeping reversals; government balancing fiscal needs with social stability. Bottom Line:  Policy adjustments are part of Malaysia’s path toward sustainable growth and revenue. Investors should monitor sector-specific shifts and use volatility to reposition portfolios strategically.

What Just Happened?  The Finance Ministry announced revisions to Malaysia’s expanded SST policy, effective July 1, 2025. Key highlights: Imported apples, oranges, mandarin oranges, and dates are now tax-exempt, alongside rice, chicken, beef, vegetables, eggs, and local fish. Service Tax registration threshold raised to RM1 million in annual sales for leasing, rental, and financial services – easing the burden on MSMEs. Earlier proposal to tax beauty services (haircuts, facials, manicures) dropped. Why This Matters: Reduces inflation pressure on essential goods. Supports small businesses by reducing compliance burden. Maintains affordability in beauty and personal care services, benefiting consumer sentiment. Money Master Take:   ✅ Position: Positive for domestic demand and MSME-focused sectors  🎯 Watch: Food retail, consumer staples, personal care segments  📉 Downside: Policy shifts could return if revenue pressures rise  📈 Upside: Stable consumer spending en...

What’s Happening? Starting July 1, Malaysia will broaden its  Sales and Service Tax (SST)  to include over  3,000 new categories of goods  and  several new service sectors . This move aims to shore up national revenue without resorting to the GST system, but  investors should be paying close attention. Key Highlights Affected goods include  steel, industrial machinery, and tech components , now taxed at 5%-10%. Services like  rentals, leasing, and business support  face an 8% tax. Even B2B exemptions only partly reduce the  cascading tax effect , potentially pushing up end-user costs. Why It Matters to Investors Unlike GST, SST doesn’t offer credits for prior-stage taxes, so  costs build up along the supply chain . This affects: Margins for manufacturers and exporters Price competitiveness of Malaysian goods Capital-intensive sectors  like construction, electronics, and logistics Industry Spotlight: Steel Under Pressure The...

The government anticipates raising an extra RM5 billion by broadening the sales and service tax (SST) scope starting May 1, 2025, according to Finance Minister II Datuk Seri Amir Hamzah Azizan . The expanded SST will increase revenue projections to RM51.7 billion , compared to RM46.7 billion currently forecast for 2025. To prevent impacting low-income groups, essential food items will be exempt from sales tax. The expanded service tax will focus on business-to-business (B2B) services , such as fee-based financial services for businesses, excluding individual consumers. Prime Minister Datuk Seri Anwar Ibrahim earlier revealed that the sales tax would apply mainly to non-essential imported goods, including premium items like salmon and avocados . Amir emphasized that SST expansion will proceed progressively to avoid undue public burden, with ongoing stakeholder consultations to finalize details. Part of the SST revenue will support cash assistance programs for the public.