Proposed Increase in Service Tax Rate and Expansion of Taxable Services – Latest Update

Further to our Tax Whiz dated 15 January 2024 on the proposed increase in Service Tax Rate and Expansion of Taxable Services, the Royal Malaysian Customs Department (“RMCD”) conducted a handholding session on 22 January 2024.

Based on the latest handholding session by RMCD, we set out below, some of the additional salient points.  Please note that these policies/ points by RMCD remains to be drafts/ proposals and are still under review by the Minister of Finance. 

Transitional rules for the proposed increase in Service Tax rate

Please click on the above header link for a summary of the proposed transitional rules.

Proposed expansion of the scope of Service Tax

1.     Group J: Logistics

Taxable person: Any person who provides logistic services

Taxable services: Include warehousing management, courier*, goods delivery, goods delivery by e-platform and customs agent*

Note*: Customs agent (Item 3 of Group I) and courier (Item 6 of Group I) will be combined into Logistics (Group J)

2.     Item 13 Group G: Repair and maintenance services (newly proposed in January 2024)

Note that the handholding session presented by RMCD is still a proposal and are still under review by the Minister of Finance. We would advise affected businesses to continuously monitor the developments and assess the impact to their business operations, particularly when the proposed effective date is fast approaching. 

Petaling Jaya Office

Soh Lian Seng
Partner - Head of Tax and Tax Dispute Resolution
+ 603 7721 7019

Ng Sue Lynn
Partner - Head of Indirect Tax
+ 603 7721 7271

Tai Lai Kok
Partner - Head of Corporate Tax
+ 603 7721 7020

Bob Kee
Partner - Head of Transfer Pricing
+ 603 7721 7029

Long Yen Ping
Partner - Head of Global Mobility Services
+ 603 7721 7018

Outstation Offices


Evelyn Lee
Partner - Penang Tax
+603 7721 2399


Crystal Chuah Yoke Chin
Associate Director - Ipoh Tax
+603 7721 2714

Kuching & Miri

Regina Lau
Partner - Kuching & Miri Tax
+603 7721 2188

Kota Kinabalu

Titus Tseu
Executive Director - Kota Kinabalu Tax
+603 7721 2822


Ng Fie Lih
Partner - Johor Tax
+603 7721 2514