How the New SST Rules Will Impact Your Invoicing & Pricing in Malaysia (2025)
- Zulfadli A
- May 10
- 3 min read
If you run a business in Malaysia, 2025 is shaping up to be a year of big changes. With the updated Sales and Service Tax (SST) rules taking effect, plus the phased rollout of mandatory e-invoicing, many business owners are already scrambling to understand what this means for their day-to-day operations—especially when it comes to pricing and invoicing.
Let’s break down what’s changing and how it might affect you.
What’s New with SST?
The government has expanded the scope of SST to bring in more revenue, as part of broader tax reform efforts. Here are some of the most notable updates:
More items now taxed – Non-essential and luxury goods that were previously not subject to SST will now be taxed. Think imported watches, high-end electronics, and certain personal care items.
Service tax rate has increased – The service tax has gone up from 6% to 8%, although some industries like food and beverages, logistics, and telcos are exempt from this increase.
Split rates remain – Not all products are taxed at the same rate. Basic goods remain exempt or taxed at 0%, while others fall under the 5% or 10% brackets depending on their classification.
These changes are already affecting how businesses price their products and services—and how customers perceive those prices.
E-Invoicing is Now a Must (For Many)
The other major shift is the national rollout of e-invoicing. This isn't just a recommendation—it’s mandatory, and it’s being phased in based on your company’s revenue:
Businesses with revenue over RM100 million: Already in effect since August 2024
RM25 million–RM100 million: Starts January 1, 2025
RM500,000–RM25 million: Starts July 1, 2025
RM150,000–RM500,000: Starts January 1, 2026
If you fall into one of these groups, you’ll need to issue invoices electronically using the government’s MyInvois platform. This includes using digital signatures, QR codes, and submitting invoice data to LHDN in real-time.
How Will This Affect Your Invoicing?
If your invoicing system is still manual or relies on generic templates, now is the time to upgrade. E-invoicing is not just a file format—it involves system integration, real-time validation, and standardized data structures.
Here’s what you’ll need to sort out soon:
Accounting software that’s compatible with MyInvois
Staff training to make sure your team understands the new workflow
Reliable internet connection and data security to transmit documents to the system
Mistakes or non-compliance could result in delays—or worse, penalties.
Pricing: Adjust or Absorb?
With the higher SST rate, many businesses will feel pressure to increase prices. But in a competitive market, especially in consumer-focused sectors like F&B, retail, and services, raising prices isn’t always straightforward.
Some businesses will choose to absorb the tax hike temporarily to maintain customer loyalty. Others may introduce price adjustments gradually or offer alternative products at lower SST rates.
If you’re considering a pricing review, think about:
How your competitors are responding
How much of the new tax you can realistically pass on to customers
Whether bundling or tiered pricing could ease the transition
What You Should Do Next
Get your invoicing system in order – Check if your current software can support e-invoicing. If not, explore integrations or replacements.
Talk to your accountant – Make sure you’re clear on how the new SST structure affects your business. This will help you make informed decisions about pricing and compliance.
Start communicating with customers – If prices are going up, be transparent about why. Many consumers are already aware of the SST hike and may be more understanding if you explain it clearly.
Conclusion
These new SST rules and the shift to e-invoicing mark a significant change in how businesses operate in Malaysia. While the changes may seem overwhelming at first, taking early action will make the transition easier—and possibly give you a competitive edge.
Don’t wait until the last minute. The sooner you adapt, the smoother things will run.
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