Govt reviewing service tax for old folks’ homes

 Putrajaya recognises that these services are becoming even more essential, as Malaysia is now deemed an ageing nation.

Old folks’ homes have been subject to service tax since September 2018 but the duty only applies if the value of a provider’s taxable services surpasses RM500,000 a year. (File pic)

PETALING JAYA:

The government is currently reviewing the taxes imposed on old folks’ homes, including service tax, says finance minister Anwar Ibrahim.

Anwar said old folks’ homes had been subject to service tax since September 2018 although the duty only applies if the value of a provider’s taxable services surpasses RM500,000 a year.

He said this threshold applied to these welfare homes as their services were commercial in nature.

Nonetheless, the prime minister said Putrajaya acknowledged the concerns raised by customers about the service tax imposed on old folks’ homes, given the burden of rising costs.

He said the government also recognised that these services were becoming even more essential, as Malaysia is now deemed an ageing nation.

“For this reason, the finance ministry and women, family and community development ministry are conducting an in-depth study to review the tax treatments on elderly care services regulated by the welfare deparment.

“The scope of the study includes the classification of elderly care centres that offer basic or premium care services, with a view to implementing the service tax in a more targeted manner,” he said in a written parliamentary reply.

Anwar added that further updates will be given after the study is completed.

He was replying to Khoo Poay Tiong (PH-Kota Melaka), who asked the minister about the rationale of imposing an 8% service tax on old folks’ homes, and whether Putrajaya planned to exempt such services from the tax scheme. - FMT