SST for electricity above 600 kWh to increase from 8% on March 1 – EV charging to cost more in Malaysia?

The sales and service tax (SST) hike from six to eight per cent, slated for March 1, will also impact your electricity bill. According to The Star, the government has confirmed it will implement the new SST rate on energy usage exceeding 600 kWh, meaning that those who already pay more than RM232 per month can expect to fork out more money.

The finance ministry said the higher rate is expected to affect 15% of electricity users. “For electricity, the SST is only applicable for usage above 600kWh. Almost 85% of users fall below this threshold and therefore will not be affected,” the ministry said in a statement yesterday.

The 8% SST, expected to generate RM3 billion in additional revenue for the government, is said to be part of tax reforms aimed at strengthening the country’s fiscal foundation.

Earlier, it was reported that the government may exempt water and electricity from the tax hike, with domestic trade and cost of living minister Datuk Armizan Mohd Ali saying a special study on the impact of an 8% SST will be presented National Action Council on Cost of Living (Naccol) for consideration. It appears the government has since decided to implement the higher rate only for selected households, with those using less than 600 kWh per month continuing to enjoy zero sales tax.

Users above that threshold were already hit by the elimination of the two-sen-per-kWh Imbalance Cost Pass-Through (ICPT) rebate at the start of the year, expected to have increased their monthly bills by between 4.2% and 6%, or between RM12 and RM32 extra.

This will have a knock-on effect on the price of charging an electric vehicle at home, which can drastically increase your energy consumption above the 600 kWh threshold. For instance, if you use 1,200 kWh a month, your bill with the 8% SST will come up to RM593.71, which is RM6.70 more than what you’d currently pay, and RM30.70 more than what you’d have paid last year with the ICPT rebate. Not a big increase, but an increase nevertheless.

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