Reminder; New Service Tax Rate Comes Into Effect On 1st March

Reminder; New Service Tax Rate Comes Into Effect On 1st March

As it was announced in Budget 2024, the service tax rate is set to increase from 6% to 8%, starting from the 1st of March 2024.

The increase encompasses all taxable services, except for food & beverages, telecommunication services, vehicle parking space services and logistic services.

Along with the increase in service tax rate, the scope of service tax will also be increased to include:

• karaoke centres
• delivery services
• brokerage and underwriting
• logistics

Logistic services were previously exempt from the service tax, but will not be required to charge the old 6% rate – instead of the new 8% rate going into effect in March.

Speaking to The Star, tax expert Christine Koh stated that there is a need to specify the type of service and its relevant taxes

Koh, who is the managing director of a public accounting firm states that as is, there has been no issuance of a latest sales and services tax (SST) guide for food and beverage that specifies the need to split the services and charge 8%.

An example Koh stated is that when a hotel provides food & beverages, it is considered as other taxable services, which will be taxed at 8%.