Transport Minister Anthony Loke Siew Fook has revealed that the Cabinet will discuss maintaining the service tax for domestic flights at 6% instead of 8% as per the new service tax rates. He added that his Ministry will also discuss the matter with the Finance Ministry (MOF) since taxes fall under the latter’s purview.
As reported by Bernama, Loke said that service tax is applicable for air tickets, hence the hike to 8% service tax going into force on 1 March affects ticket prices. However, the Transport Minister said that the Cabinet will deliberate on the proposal to maintain service tax at 6% for domestic flights.
For reference, service tax has been increased to 8% on 1 March, as announced during the tabling of Budget 2024 in the Dewan Rakyat in October last year. The Cabinet meeting will be held this Friday.
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