Why must we pay SST to protect ourselves?

 When police response is too slow, Malaysians have no choice but to engage security services.

There is a quiet, expensive irony playing out in housing estates across Malaysia.

Just like condo dwellers, owners of ordinary single-storey and double-storey terrace houses are now paying monthly fees for private security services.

The reason? Police response is just too slow. And on every ringgit of that fee, Putrajaya charges an 8% service tax.

This is a direct appeal to the minister of finance: please do not impose the sales and service tax (SST) on security and guard services rendered to residents of landed residential property. It is not a big ask. It is a fair one.

When self-protection became a tax line

Boom gates, guardhouses and CCTV rooms used to be the preserve of condominiums and bungalows in a gated community.

Today, they have spread into neighbourhoods of ordinary terrace houses nationwide, run by unpaid residents’ association volunteers with no statutory enforcement powers.

They are negotiating contracts and collecting dues from often-reluctant neighbours on roads that remain, legally speaking, public property.

Courts have even ruled that non-paying residents cannot be barred from entering, proof of how legally fragile, yet practically unavoidable, these citizen-funded schemes have become.

Multiply a typical RM50 to RM150 monthly household contribution across thousands of guarded housing estates nationwide, and residents are pushing millions of ringgit a month into the private security industry, money on top of income tax, cukai pintu and assessment, for a service that should, in principle, be the job of the police.

A tax on the workaround

Since March 1, 2024, “guard or protection services for safety or security” have been listed as taxable under Group G of the Service Tax Regulations, with the rate raised from 6% to 8% in the same move.

In effect, the government taxes the very workaround citizens invented because policing coverage has not kept pace with urban growth.

In an open letter in April 2024, residents’ associations appealed on behalf of neighbourhoods nationwide for an exemption for non-strata residential units. More than two years later, nothing has changed.

If anything, the tax base has widened. The July 2025 SST expansion pulled construction, rentals, financial services, private healthcare and education into the same scope.

This was projected to raise an extra RM5 billion in 2025 and RM10 billion in 2026. Household security fees were not exempted.

Yet the government clearly knows how to exempt necessities when it chooses to. Residential construction materials are excluded from the expanded SST specifically “to safeguard rakyat affordability”, and staples like rice, chicken, vegetables and medicines remain zero-rated.

If affordable food and shelter deserve protection, so does the safety of a family, arguably more so, since there is no substitute for it given that the policing gap is real.

The numbers don’t lie

This isn’t residents being dramatic. Malaysia’s crime index jumped 11.1% in 2024 to 58,255 cases, driven by a 12.4% rise in property crime, precisely what guarded schemes exist to deter.

Selangor alone logged 115 murder cases in under two years, the highest for any state, with police citing urban sprawl outpacing enforcement.

Tellingly, by early 2026 the national crime index had fallen 6.4%, which police themselves attributed to “increased security operations nationwide”, while Kuching saw property crime fall 9.9% alongside heavier neighbourhood security presence.

Private, resident-funded security is quietly doing the work that stretched police resources cannot.

It is filling exactly the same gap left by police stations without walk-in reporting counters, and pondok polis outposts with no patrol car to dispatch when a call comes in.

The fair trade: tax relief for police reinforcement

Budget 2026 has already signalled a shift towards refining rather than expanding SST, including broader business-to-business exemptions.

This is the moment to add residential guard services to the exemption list, alongside staple food and residential construction.

It would be a small slice of the roughly RM83 billion in projected 2026 indirect tax collection while delivering real relief to millions of ratepayers.

But tax relief alone won’t fix the underlying gap. Alongside the exemption, government must reinforce visible policing:

• Restore neighbourhood reporting counters. Stations that quietly stopped taking walk-in reports should reinstate that function, or offer digital satellite kiosks, so residents don’t have to travel across town to file a report.
• Give pondok polis actual mobility. A guard post without a patrol car is a signboard, not a deterrent. High-density estates need at least a motorcycle patrol unit on rotating shifts, building on the police’s existing fleet of more than 1,800 URBs and 3,000 MPVs nationwide. Deployment simply needs to reach the pondok level.
• Formalise co-policing with Rukun Tetangga, linking citizen patrols directly with the nearest mobile unit via apps like PDRM’s VSP, rather than a general hotline.
• Speed up patrol vehicle renewal, since ageing fleets and workshop backlogs have historically kept many units off the road, a direct cause of slower response in the very housing estates now paying for private cover.
• Publish district-level response-time data, so the public can see exactly where police coverage is thinnest.

Malaysians are not trying to dodge civic duty. They are asking not to be taxed for filling a gap the state itself has left open and to see genuine reinvestment in the frontline institutions, the pondok, the reporting counter, the patrol car, that are meant to protect them in the first place.

Mr Finance Minister, this budget is the moment to act, please! - FMT

The views expressed are those of the writer and do not necessarily reflect those of MMKtT.