Malaysia’s Ministry of Finance announced that its planned expansion of the sales and service tax, initially planned for implementation on 1 May 2025 as outlined in Budget 2025, will be postponed.
The ministry said the sales and service tax will be implemented at a later date. The move gives Malaysian manufacturers a temporary respite from higher US tariffs. Malaysian manufacturers have requested that the government impose new taxes this year, following the US President Donald Trump’s imposition of a 24% tariff on the country’s exports to the US.
However, the Trump Administration has paused the tariffs for 90 days for all countries, except for the tariffs imposed on China. In the meantime, Malaysian officials are working to secure a trade deal with Washington.
The tax changes, initially planned for the first quarter, are now set to be officially gazetted on 1 June 2025.
Earlier, on 18 October 2025, Malaysia’s Prime Minister Anwar Ibrahim announced the nation’s budget, revealing that the sales and service tax would be expanded to include non-essential items, such as imported goods like avocados and salmon.
On 1 January 2024, Malaysia introduced a 10% sales tax on imported low-value goods (LVG) sold in the country. The 10% tax applies to all online imported goods valued at under MYR 500. Initially set to start on 1 April 2023, the LVG rules were delayed to 1 January 2024.
