FX.co ★ Malaysia Pushes Back Tax Expansion Amid U.S. Tariff Threat

Malaysia has postponed the anticipated expansion of its sales and service tax, providing a temporary relief to manufacturers who are under the threat of upcoming U.S. tariffs. Originally slated for implementation on May 1, the broadening of the tax base will now take effect at a later date, according to a spokesperson from the Ministry of Finance. Manufacturers had appealed to the government to withhold additional tax impositions this year due to the U.S.’s threat of imposing a 24% tariff on Malaysian goods. This sector is a significant contributor to tax revenue and is experiencing "severe cost pressure," according to Soh Thian Lai, president of the Federation of Malaysian Manufacturers. The finance ministry has concluded consultations with the industry to determine the scope and rates of the expansion, and is refining guidelines to ensure a seamless implementation. The changes are expected to be published on June 1.