KUALA LUMPUR, June 19 — The expansion of the sales and service tax (SST) to private health care will hurt general practitioner (GP) clinics the most, say two medical groups.
Malaysian Medical Association (MMA) president-elect Dr R. Arasu cited the 6 per cent SST on private health care services for non-citizens, which will come into effect on July 1, and e-Invoicing beginning August that poses another layer of compliance.
“A policy meant for private hospitals is now hitting GP clinics,” Dr Arasu posted on X recently, describing SST and e-Invoicing as “desktop policies, not ground realities.”
He pointed out that the government is imposing 6 per cent SST on private health care, even while GP consultation fees have not been revised for more than three decades since 1992.
Dr Arasu also noted that more than 80 per cent of private GP clinics in Malaysia are run by solo practitioners. Most clinics make less than RM1.5 million revenue annually, hence are exempt from SST.
The MMA president-elect also pointed out that foreigners who seek treatment in private GP clinics are mostly low-wage workers in 3D jobs (dangerous, dirty, and difficult).
Compliance cost exceeds SST revenue collected. Segregating patients based on nationality for taxation purposes will be a “nightmare” and cause high staff turnover.
“The outcome is GPs quitting and young doctors discouraged. General practice may collapse within five years,” wrote Dr Arasu.
“This isn’t reform – it’s regression and erosion.”
Federation of Private Medical Practitioners’ Associations Malaysia (FPMPAM) president Dr Shanmuganathan Ganeson said the SST threshold of RM1.5 million annual revenue, starting from July 1, 2026, excludes the vast majority of GP clinics that are small to medium practices.
“Clinics that do exceed the threshold are typically larger group practices or medical centres, often with their own administrative and accounting teams, so while there will be additional compliance work, it is manageable for them,” he told CodeBlue.
“Therefore, for most GPs, the impact will be minimal or none. However, it does highlight the increasing regulatory and administrative burdens on private clinics, reinforcing the need for an RCC (Regulatory Compliance Charge) to help sustain clinic operations.”
The Association of Private Hospitals Malaysia (APHM) has called for a postponement of the SST on private health care services for foreigners, saying private hospitals need more time to make operational adjustments to comply with the new tax rule.
Health Minister Dzulkefly Ahmad met MMA last Monday to discuss a review of GP consultation fees under Schedule 7 of the Private Healthcare Facilities and Services Act 1998 (Act 586).
The review is currently with an executive committee chaired by Deputy Prime Minister Ahmad Zahid Hamidi that will make a decision this Monday, according to the health minister.
MMA has made two proposals to the government to revise GPs’ consultation fees that have stagnated at RM10 to RM35 for 33 years: a floor rate of RM55 without a ceiling or a rate of RM50 to RM80 that is reviewed every three years based on inflation.
About 70 per cent of GPs’ patients come from third-party administrators (TPAs) that act for multinational corporations, government-linked companies, and large businesses.
“An excessively low consultation fee forces GPs to rely on drug margins and panel payments, but both are under pressure because of TPA controls and new policies,” according to an MMA document dated June 8 on GP issues, as sighted by CodeBlue.
“GPs are unable to leave the TPA system, while the implementation of drug price display will erode the margins that have helped cover a clinic’s operational costs all this while.”
MMA wants an “immediate” decision on a GP fee revision to avoid an isolated implementation of the medicine price transparency policy.
