The Malaysian government is currently evaluating a proposal to exempt elderly care centres from the eight per cent Sales and Service Tax (SST). This initiative, led by the Ministry of Finance and the Ministry of Women, Family and Community Development, aims to address the rising financial burden on families who rely on these essential services. As Malaysia transitions toward becoming an aged nation, the affordability of care for senior citizens has become a pressing policy concern.
Currently, elderly care centres registered with the Social Welfare Department (JKM) are subject to the eight per cent service tax if their annual taxable services exceed RM500,000. This tax has drawn criticism for increasing the cost of living for ordinary families, with some monthly fees reaching RM2,500. Officials are now reviewing how these centres are classified, specifically looking at the differences between basic welfare-oriented care and premium services.
Deputy Finance Minister Liew Chin Tong confirmed that the government is conducting an in-depth study to assess the impact of the tax on vulnerable groups. The review process will include engagement sessions and working visits to various care facilities to better understand the operational realities faced by providers. By gathering direct feedback from stakeholders, the government hopes to develop a more targeted approach to tax policy that balances fiscal needs with social welfare.
While the study is ongoing, the government has emphasized that resolving issues affecting the elderly remains a priority. The outcome of this review could lead to significant changes in how elderly care services are taxed, potentially providing relief to thousands of families. Further updates are expected once the ministries finalize their assessment and consider the feedback from industry operators and the public.