“What’s the update on TCM SST issue?” MCA asks Hui Ying

“What’s the update on TCM SST issue?” MCA asks Hui Ying

AN MCA leader has slammed Deputy Finance Minister Lim Hui Ying for the lack of action concerning the government’s decision to impose 8% sales and service tax (SST) on traditional and complementary medicine (TCM) services starting March 1, 2024.

According to MCA deputy secretary-general Datuk Dr Pamela Yong, Lim had announced that she would engage with industry stakeholders, the Customs Department and the Finance Ministry’s tax division through a dialogue session to find a solution but to date, there has been no follow-ups on the matter.

“Despite two weeks having passed, the public has yet to see any substantial further follow-ups. Hence, we are keen to know if the dialogue has begun, and more importantly, whether the Malaysia Madani government will reverse this decision,” Yong said in a statement on Tuesday (Jan 9).

Datuk Dr Pamela Yong


“Lim is urged to provide an explanation, in the shortest time possible, as to when the Finance Ministry (MOF) and other related government agencies will conduct a dialogue with TCM practitioners.

“Lim also needs to clarify as to whether she will report to MOF and the Finance Minister II (Datuk Seri Amir Hamzah Azizan) that the 8% SST slapped on TCM services is unreasonable and that it would be considerate to withdraw this tax.”

On Dec 28, China Press reported that TCM providers were shocked after they received letters from the customs department notifying them of a retrospective imposition of 6% SST on TCM services from 2018.

The current SST rate of 6% will be increased to 8% from March.

The services that are taxable include massages, acupuncture, cupping and scraping. However, medical consultations and prescription of medicine are exempted.

In response to this, Lim had clarified that the collection of service tax for TCM services is not a sudden decision by the current government but has been applicable since 2018, adding that this was already determined in the 2018 guidelines on service tax.

Saying that she understands the public’s worries about the service tax on such traditional medicine services, Lim also said she would be meeting industry players soon to listen to their views.


Discrimination against TCM

Yong also said the decision to impose an 8% SST on TCM services discriminate against TCM service providers and patients as Western and modern medical care are not subjected to any service taxes.

“The government’s letter also stipulated that the SST charges on TCM services must commence from 2018. Backdating the SST may cause some TCM service providers to ill-afford paying it and will drive them out of business and their staff to lose their jobs,” she stressed.

“Our nation’s public health services have been receptive to TCM treatment over the decades. In certain hospitals, patients may seek TCM treatment or medicines at the same time to achieve better results.

“However, on taxation matters, the government clearly has contradictory stands on distinguishing services to be recognised as public health in the country.

“Thus, we urge Lim to work actively, undertake a positive role at MOF, and cease performing her duties half-heartedly. Instead, immediately respond to public feedback and abolish this tax decision.” – Jan 9, 2024