New Tax Alert: Electric bills over RM220 subjected to 8% tax starting 1 March 2024

As of March 1st, the government increased the service tax on electricity bills from 6% to 8% to those of us whose electricity consumption exceeds 600 kWh or whose bills surpass RM220

Prepare yourself for a slight change on your monthly spending plan: as of March 1st, the government increased the service tax on electricity bills from 6% to 8%. This effects on those of us whose electricity consumption exceeds 600 kWh or equivalent to bills surpass RM220.

Before you start scratching your head, Datuk Johan Mahmood Merican, the Secretary General of Treasury confirmed what the execution looks like. Over 85% of us, whose power consumption is less than 600 kWh per month, can keep our bills tax-free.

"No big changes for those already in the tax club," Datuk Johan stressed. "We are merely drawing attention to the fact that the service tax (6%) now favors the high-power group (600 kWh and above), which is, let's admit it, not a large group."

The commercial and industrial electricity consumers will also not be charged the service tax, sincethey have always been exempted. Additionally, the service tax will not apply to water bills. However, this rise does not include services such as food and beverage (F&B), telephones, parking fees, and logistical services, including products delivery.

How does this affect your RM220 electricity bill? An 8% tax will increase the total by RM17.60, bringing it to RM237.60. This shows the uncertainties of energy prices that is projected to increase bit by bit.

What can we do? We can always hedge against the uncertainties by implementing solar power for your home. With solar energy powering your home, you’ll reduce your reliance on national grid’s power by potentially reducing total energy import from the national grid to be less than 600kWh and enjoy zero tax with tremendous savings! It is the best time to go solar with Amperage and achieve energy independence today.