8th September 2025 - 2 min read
The government has clarified that scholarships, education loans, and fee exemptions will not be subject to service tax. Deputy Finance Minister Lim Hui Ying confirmed that these forms of financial assistance are fully exempt, whether provided by universities, colleges, private schools, or international schools.
From 1 July 2025, service tax in the education sector will apply only in very specific cases. It will cover private primary and secondary schools that charge annual fees above RM60,000 per student, and higher education institutions that enrol non-Malaysian students.
According to Lim, this targeted approach ensures that the vast majority of families in Malaysia will not be affected. Of the 569 private schools registered nationwide, only 27 schools currently charge fees exceeding RM60,000 per year, making them subject to the new tax.
Lim explained that the move is part of the government’s effort to broaden the tax base in a measured way. At the same time, the policy aims to protect access to education for Malaysian families by keeping local students free from additional tax burdens.
The announcement followed a statement made by MCA deputy president Datuk Mah Hang Soon on social media, where he questioned the application of a 6% sales and service tax (SST) on scholarships, sponsorships, and fee exemptions at private and international schools.
In response, Lim stressed that such claims were inaccurate. She urged the public to verify information directly with the Ministry of Finance or the Royal Malaysian Customs Department to avoid being misled by false or incomplete statements.
Lim, who is also the Member of Parliament for Tanjung, reaffirmed her ministry’s commitment to safeguarding the interests of Malaysians. She noted that policies are designed with a “people first” approach, ensuring that financial measures do not compromise educational opportunities for citizens.
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Samuel writes about personal finance and financial news, focusing on how banking updates, policies, and promotions affect everyday money decisions. He enjoys making complicated financial topics easier to follow. Outside of writing, he spends his time watching TV shows and occasionally convincing himself he will only watch one episode.
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