MBAM hails govt’s SST response as step forward for industry

• Effective July 1, 2025, the measures include a one-year exemption for non-reviewable contracts, separation of taxable service and non-taxable material components in mixed contracts, and exemption for residential portions in mixed developments.

KUALA LUMPUR (Oct 28): The Master Builders Association Malaysia (MBAM) welcomed the government’s response to industry feedback on the sales and service tax (SST), calling it a constructive step forward for sectoral stability.

In a press statement issued on Tuesday, the association praised the Ministry of Finance and the Royal Malaysian Customs Department for recent clarifications, citing Service Tax Policy No 3/2025 (Amendment No 1) and Service Tax Policy No 7/2025 as evidence of policy responsiveness.

“These recent announcements show the government is committed to listening and taking a balanced approach,” MBAM president Oliver Wee said in a statement.

Effective July 1, 2025, the measures include a one-year exemption for non-reviewable contracts, separation of taxable service and non-taxable material components in mixed contracts, and exemption for residential portions in mixed developments.

Also introduced is a business-to-business exemption for consultancy services within single design-and-build contracts, where tax will be imposed only at the main contractor level.

The MBAM said the new provisions provide both immediate relief and long-term clarity for contractors, developers and related stakeholders.

The association also reiterated its support for continued engagement to refine the SST framework as Malaysia moves towards Vision 2030.

As Penang girds itself towards the last lap of its Penang2030 vision, check out how the residential segment is keeping pace in EdgeProp’s special report: PENANG Investing Towards 2030.