The letter from the RMCD was sent to eight bodies , including those representing traditional Malay medicine , traditional Indian medicine practitioners and traditional Islamic medicine practitioners . The eight bodies are the Federation of Chinese Physicians and Acupuncturists Associations Malaysia ( FCPAAM ), the Federation of Chinese Physicians and Medicine Dealers Association of Malaysia ( FCPMDAM ), the Gabungan Pertubuhan Pengamal Perubatan Tradisional Melayu Malaysia ( Gapera ), the Pertubuhan Perubatan Tradisional India Malaysia ( Peptim ), the Malaysian Homeopathic Medical Council ( MPHM ), the Federation of Complementary & Natural Medical Associations Malaysia ( FCNMAM ), the Persatuan Perubatan , Pengubatan dan Kebajikan Islam Malaysia ( Darussyifa ’) and Malaysian Chinese Medical Association ( MCMA ).

In a letter dated Dec 14 sent to the eight T & CM associations , the Ministry of Health ( MoH ) said many operators of businesses which offer traditional and complementary medicine treatments with a threshold value of RM500,000 per annum were not aware that they needed to pay the Sales and Service Tax ( SST ).

The Ministry said the business comes under the taxable health and wellness category . It also ordered practitioners to clear their SST arrears from 2018 by May next year .

Under the SST regime introduced in 2018 , T & CM services , including acupuncture , Tui Na , cupping therapy , and Gua Sha , were categorised as complementary services subject to a six per cent service tax . However , the situation remains unclear as MCMA President Dr Heng Aik Teng highlighted the need for more clarity on which specific services fall under this taxable category .

Notably , the service tax landscape in Malaysia is set to undergo further changes , with the government proposing an increase in the tax rate to eight per cent starting Mar 1 , 2024 , affecting all taxable services .

Interestingly , western medicine practitioners are exempted from this tax , while TCM practitioners are categorised under taxable services alongside nightclubs , dance halls , and health and wellness centres .

Dr Heng Aik Teng

Lim Hui Ying

Tan Sri Lee Lam Thye

to all the different professions registered under the MoH as some were exempted and not discussed with the industry players or stakeholders before the decision was made ,” Lee told The HEALTH .

“ This is totally unfair to the business owners as they are being asked to pay a sum that was not collected from patients . The industry had major impact during Covid-19 with the lockdowns and backdating the SST may put financial burden on the business operators and may even lead to closure of businesses ,” Lee said .

Dr Heng said the MCMA has sought clarification from both the MoH and RMCD regarding the scope of services subject to the service tax . Despite the uncertainty , he confirmed a willingness from the MoH to engage in discussions with industry players to address concerns and explain the tax collection process .

Meanwhile , Deputy Finance Minister Lim Hui Ying clarified that the imposition of service tax on TCM services was not a recent decision but has been in effect since 2018 , as outlined in the guidelines on service tax . Lim further explained that TCM , along with traditional Malay and Indian medicine , falls into a taxable category , necessitating registration and payment of service tax for those exceeding RM500,000 in annual taxable services .

To address all public concerns , Lim clarified that the service tax would only apply to the services provided by T & CM practitioners , not the medications . She acknowledged the industry ’ s worries and expressed her willingness to meet with industry players , Customs officials and representatives from the Finance Ministry ’ s tax division to address concerns and clarify the tax collection mechanism .

IMPACT ON PRACTITIONERS AND PATIENTS

As T & CM outlets anticipate a significant price jump with the impending eight per cent SST hike in March , Dr Heng voiced concerns about the potential impact on business , predicting a downturn of at least 20 per cent .

Lee raised concerns about the broader impact beyond T & CM , highlighting that it includes various practices such as chiropractic , traditional Malay medicine , traditional Indian medicine , osteopathy , homoeopathy , and Islamic medical practice .

“ The imposition of SST on these services may increase healthcare costs as the SST is to be paid by the patients at the end of the day ,” he noted , which will potentially cause patients to opt for cheaper alternatives from unqualified practitioners , thereby compromising healthcare standards .

The Health Ministry ’ s letter to TCM associations emphasised the need for operators to settle SST arrears by May next year , further complicating the financial landscape for these traditional and complementary medicine practitioners .

Looking ahead , Lee suggests that the government should refrain from backdating SST from 2018 . He advocates for the recognition of T & CM practices as integral to healthcare . Additionally , registered practices with the MoH should be exempted from SST , relieving practitioners facing financial challenges .

As the government navigates these changes , addressing the concerns of T & CM practitioners and implementing fair policies become imperative for the sustainability of Malaysia ’ s traditional and complementary medicine sector . – The HEALTH

CLARITY AND COMMUNICATION ON TAXATION POLICY

Alliance for a Safe Community Chairman Tan Sri Lee Lam Thye said The transition from Goods and Services Tax ( GST ) to SST was not very clear as GST was imposed on all the services and products while SST was selective . “ This was not well communicated