KUALA LUMPUR: The government has raised the service tax registration threshold from RM500,000 to RM1 million for leasing, rental, and financial services, in a bid to ease the compliance burden on micro and small businesses.

Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim said the move is part of ongoing efforts to refine Malaysia's tax framework in line with public feedback and industry concerns.

The revision is expected to benefit small-scale operators, particularly in machinery leasing, equipment rental, and non-bank financial services, who are often challenged by narrow profit margins and intense market competition.

By increasing the registration threshold, the government aims to reduce the number of small businesses required to register for the tax, allowing them to focus resources on growth and operations rather than administrative obligations.

This measure follows recent exemptions granted to beauty and personal care services, underscoring the government's commitment to a more inclusive and responsive tax system.

Industry groups have welcomed the latest adjustment, noting that it will help alleviate compliance costs and reduce red tape, especially for family-run and sole proprietor businesses.