MRMA urges review of SST on commercial rentals to prevent impact on end-consumers

• MRMA highlighted that the proposed expanded SST, which is expected to take effect on July 1, is likely to result in higher costs for end-consumers, as businesses across the affected sectors may pass on the additional tax burden in the form of higher prices for goods and services. Elevated price levels could add inflationary pressure on the broader economy and potentially dampen household purchasing power.

KUALA LUMPUR (June 18): The Malaysian REIT Managers Association (MRMA) warns that the proposed 8% sales and services tax (SST) on commercial rental and leasing services could result in a knock-on effect on end-consumers, leading to elevated cost pressures.

In a press statement issued on Wednesday, MRMA highlighted that the proposed expanded SST, which is expected to take effect on July 1, is likely to result in higher costs for end-consumers, as businesses across the affected sectors may pass on the additional tax burden in the form of higher prices for goods and services. Elevated price levels could add inflationary pressure on the broader economy and potentially dampen household purchasing power.

"While we support the government’s fiscal sustainability goals, the expanded SST on rental income creates immediate headwinds for the consumers [rakyat]. We seek constructive dialogue with the MOF [Ministry of Finance] to explore mitigative measures," said MRMA chairman Leong Kit May (pictured) in the statement.

MRMA also urged the policymakers to clarify exemption criteria for REIT tenants to avoid double taxation, consider phased implementation to allow market adjustment, as well as further engagement with industry stakeholders to minimise unintended consequences.

“MRMA remains committed to working with regulators to ensure a balanced tax policy that supports both fiscal objectives and the growth of Malaysia’s REIT industry. Investors and stakeholders are advised to monitor further updates on SST exemptions and sector-specific guidance,” it noted.

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