Sales and Service Tax
Malaysia imposes sales tax which is set around 10%. This is set according to the Malaysia Sales Tax Act 1972. It is stipulated that there will be no tax imposed on raw material if they are used to produce taxable goods.Otherwise, most other goods and services come with an ‘invisible’ 10% tax. Sales tax are usually absorbed by the sellers and are then paid to the government and hence the consumers usually are not aware of it. In some situations, the sales tax are itemized during the purchase but this is rarely the case.
Depending on what is being sold, as mentioned, the average is around 10% although the sales tax for cigarettes and liquor is higher which is over 15%. There are also some material which are taxed at 5% like non essential foodstuff and building material.
Meanwhile, Service Tax are imposed on certain industries and this is very common among those in the hospitality sector. Service tax generally are imposed within service industry and hence you will sometimes notice this tax on the receipts after checking out from a hotel room or after having a meal. Other services that come with service tax include parking services, consultancy and others.