A ministry spokesman said there are two gazette orders that list the goods exempted and those taxed at 5%: the Sales Tax (Goods Exempted From Sales Tax) Order 2025 and the Sales Tax (Rate of Sales Tax) Order 2025.

“Items not included in the two lists are taxed at 10%.

“Selected basic foods that are imported such as rice, wheat, sugar, salt, and meat are exempted as they are considered basic essentials.

“Locally manufactured and imported palm oil for cooking is also exempted,” he said.

The spokesman also said that while the 5% rate applies to raw sugar – defined as “cane or beet sugar and chemically pure sucrose in solid form” – the 0% rate applies to refined sugar.

On Monday, the ministry announced that the 0% sales tax rate for basic necessities would be maintained while a 5% to 10% rate would be imposed on non-essential goods from July 1.

The service tax will be expanded to include rent, lease, construction, financial services, private healthcare, and education.

“This expansion however will come with some exemptions to avoid double taxation and ensure that Malaysians are not taxed for certain services,” said finance minister II Amir Hamzah Azizan.