KUALA LUMPUR, June 30 — Six associations representing doctors, community pharmacists, and physiotherapists have called for an exemption of the expanded sales and service tax (SST) on private primary care.
The groups expressed concern with the impact of 8 per cent SST on commercial rent, 6 per cent SST on private health care services provided to foreign patients, as well as the upcoming revision of electricity tariffs that are all set to take effect on July 1 tomorrow.
“The combination of rental SST and increased utility charges threatens the sustainability of many private health care practices,” said the Malaysian Medical Association (MMA), Pertubuhan Doktor-Doktor Islam Malaysia (Perdim), the Medical Practitioners Coalition Association of Malaysia (MPCAM), the Malaysian Association for Advancement of Functional & Interdisciplinary Medicine (Maafim), the Malaysian Community Pharmacy Guild (MCPG), and the Private Physiotherapy Clinics Owners Association of Malaysia (PPCOA) in a joint statement today.
The six associations noted that rental is among the largest fixed operating costs for clinics, pharmacies, and health care facilities – particularly in urban areas where property prices are highest.
They further pointed out that doctors’ consultation fees have not been revised under the Private Healthcare Facilities and Services Act 1998 (Act 586) for more than three decades.
“Health care providers, therefore, have very limited ability to absorb or pass on these escalating costs. Pharmacies and other allied health providers likewise operate on tight margins, especially when serving price-sensitive communities,” said the six groups.
The government has raised the service tax registration threshold from RM500,000 to RM1 million for leasing, rental, and financial services. But the medical and pharmacist groups said equating the RM1 million threshold to high profitability was misleading in the context of health care.
“Providers often surpass this figure due to the essential and continuous nature of the services they deliver — not because of large margins. This one-size-fits-all approach to taxation is inherently unfair, as it penalises health care operators for fulfilling public health needs.”
The medical and pharmacist groups also said most foreign patients who visit private general practitioner (GP) clinics are low-wage workers in 3D (dirty, dangerous, and difficult) jobs.
“These individuals depend on GP clinics for affordable, essential care. Taxing these services raises humanitarian and public health concerns, particularly when it penalises those least able to afford care.
“Furthermore, the revised RM1.5 million annual revenue threshold for SST registration remains problematic — a small percentage of clinics cross this threshold due to volume, not profit, given regulated fees and tight margins.”
Hence, the six groups urged the government to exempt health care providers from the 8 per cent SST on rental and the 6 per cent SST on private health care services provided to foreign patients, especially for the primary care sector.
“We urge the government to reconsider the application of SST on rental and services in the primary care sector to prevent unintended consequences that may compromise access, continuity of care and the nation’s broader public health objectives.”
Yesterday, the Federation of Private Medical Practitioners’ Association (FPMPAM) similarly called for an exemption from SST on private health care services provided to foreign patients, besides expressing concern about the levy of SST on commercial property rentals.
