Government reviewing SST exemption for elderly care centres to ease financial burden on families
KUALA LUMPUR: The federal government is reviewing the possibility of exempting registered elderly care centres from the Sales and Service Tax (SST) as part of efforts to minimise rising care costs and protect vulnerable groups from additional financial pressure.
The Ministry of Finance (MoF), working together with the Ministry of Women, Family and Community Development (KPWKM), is currently conducting a detailed assessment of the proposal, including the potential impact of the existing eight per cent service tax on the elderly care sector.
Deputy Finance Minister Liew Chin Tong said the study aims to determine whether different categories of care providers should be treated differently under the tax framework, particularly by distinguishing facilities that provide basic care services from those offering premium accommodation and specialised healthcare.
According to him, the review is intended to ensure that tax policies remain targeted and do not disproportionately affect senior citizens or families already struggling with rising living expenses.
“The government is carefully evaluating the current service tax structure to determine whether improvements are necessary while ensuring vulnerable groups are not unfairly burdened,” he said during the Dewan Rakyat Special Chamber session.
Liew added that feedback from industry stakeholders, care home operators and relevant organisations would form an important part of the review before any decision is made.
He said the government remains open to proposals that could improve the tax framework while balancing fiscal sustainability with the welfare needs of Malaysia’s ageing population.
The issue was raised by Lee Chuan How (PH–Ipoh Timor), who urged the government to exempt Social Welfare Department (JKM)-registered elderly care centres from the eight per cent SST.
Lee argued that the tax has increased financial pressure on middle-income and lower-income households, particularly families paying monthly care fees that typically average around RM2,500, resulting in significantly higher overall expenses.
He said many families have little choice but to rely on professional elderly care services as Malaysia’s ageing population continues to grow and family caregiving arrangements become increasingly challenging.
Responding to the concerns, Liew said the Finance Ministry is prepared to conduct site visits to elderly care facilities to gain a clearer understanding of the operational and financial challenges faced by service providers.
He said ministry officials will work alongside KPWKM to engage directly with operators, allowing policymakers to assess the actual impact of SST on the industry before finalising any policy recommendations.
The engagement sessions are expected to provide first-hand insight into operating costs, pricing structures and the financial pressures affecting both care providers and residents.
Liew stressed that resolving issues affecting elderly care remains a priority, adding that the government intends to focus on addressing concerns within the sector before expanding similar reviews to other industries.
Meanwhile, Deputy Speaker Datuk Dr Ramli Mohd Nor said the Dewan Rakyat Special Chamber concluded its latest sitting after considering 63 motions submitted under Standing Order 17 throughout the 16-day parliamentary meeting.
He said the debates involved responses from 18 ministries together with one ministerial briefing, reflecting broad parliamentary engagement on national policy issues.
Ramli also noted that the sitting provided opportunities for both government and opposition Members of Parliament to preside over proceedings under Standing Order 16(3), with nine government backbenchers and three opposition MPs taking turns chairing the Special Chamber before the sitting was adjourned sine die.
