The SST Divide: Why Some Malaysian Families Pay 8% More for Elderly Care (And What Budget 2026 Must Fix)

Last Updated: December 2025

Right now, across Malaysia, elderly care centers registered under the Department of Social Welfare (JKM) are grappling with a new tax reality. Since July 1, 2025, these facilities have been required to charge 8% service tax on their services—a tax that MOH-licensed nursing homes don’t have to charge Malaysian citizens at all.

Most Malaysian families have no idea this tax divide even exists.

With Budget 2026 now tabled, it’s time families understood exactly what they’re paying for—and why the type of facility license matters more than ever.

The SST Shock: A Tale of Two Licenses

Since July 1, 2025, Malaysia’s expanded Sales and Service Tax (SST) rules created an unexpected divide in elderly care pricing.

Here’s what’s happening:

JKM-Registered Elderly Care Centers (489 Facilities Nationwide)

Under the amended Service Tax Regulations 2018 [P.U. (A) 172/2025], the definition of “pusat kesejahteraan” (wellness centre) was expanded to include “penjagaan kesejahteraan bagi orang tua” (welfare care for elderly people).

This means elderly care centers registered under the Care Centres Act 1993 (Act 506) with the Ministry of Women, Family and Community Development (JKM) are now classified under Group C of the First Schedule, Service Tax Regulations 2018.

The result:

• 8% service tax on all services
• Applied to ALL customers (Malaysian citizens and non-citizens alike)
• Registration threshold: RM500,000 annual revenue
• No citizenship exemption

Industry representatives have raised concerns with the government, arguing that:

• Elderly care is a welfare service, not a commercial service
• Seniors are paying from post-tax retirement savings (already taxed once)
• The additional 8% burden limits quality of life for vulnerable elderly

But policy changes take time. Meanwhile, families are paying the extra 8%.

MOH-Licensed Nursing Homes (Only 19 Facilities Nationwide)

Facilities licensed by the Ministry of Health under the Private Healthcare Facilities and Services Act 1998 (Act 586) are classified as private healthcare providers exempt from charging SST to Malaysian citizens.

The result for Malaysian citizens: ZERO SST. Completely exempt.

This exemption covers:

• Nursing care and medical services
• Rehabilitation and physiotherapy
• Accommodation and meals
• Pharmaceutical services
• All medical equipment and support
• Consultation fees

Note: Non-Malaysian citizens (including Permanent Residents and foreign nationals) at MOH-licensed facilities are subject to 6% SST.

What This Means in Ringgit and Sen

Let me show you the real impact on a typical Malaysian family:

Scenario: 75-year-old mother requiring moderate nursing care

Option A: JKM-Registered Care Center

Option B: MOH-Licensed Nursing Home (like BIGTREE)

The facility that appears “cheaper” actually costs the same or more—and that’s before you factor in separate medical expenses at JKM centers.

Over 5 years of care, the SST alone at a JKM center adds up to RM16,800.

Why The License Type Determines Tax Treatment

The fundamental difference comes down to how Malaysian law classifies these facilities:

MOH-Licensed = Healthcare Facility

• Must have licensed doctors and nurses on staff
• Subject to Ministry of Health clinical standards under Act 586
• Regular medical inspections and compliance audits
• Classified as providing “perkhidmatan jagaan kesihatan swasta” (private healthcare services)
• Malaysian citizens exempt from SST

JKM-Registered = Wellness/Care Facility (Group C)

• No requirement for medical staff
• Focused on basic care and accommodation under Act 506
• Classified as “pusat kesejahteraan” providing “penjagaan kesejahteraan bagi orang tua”
• Subject to 8% SST on all customers
• No citizenship exemption available

The irony? Families choosing higher medical standards pay less tax.

The Numbers Don’t Lie

Sources: CKAPS (Oct 2025); JKM (Nov 2025)

That’s 19 MOH-licensed facilities serving a nation of 33 million people—versus 489 JKM-registered centers now subject to 8% SST on every customer.

Regulatory References

For families and operators seeking official documentation:

What Budget 2026 Must Address

Budget 2025 allocated RM1 billion for elderly welfare—the largest ever. Senior allowances for hardcore poor households increased from RM500 to RM600 monthly.

But here’s the problem: that RM600 allowance doesn’t even cover the SST at many JKM-registered centers, let alone the actual care costs.

Malaysian families need answers to these urgent questions:

1. Will SST Be Waived for All Registered Elderly Care Facilities?

If the government grants SST exemption to JKM centers, families save thousands annually. But the uncertainty is unfair—families need clarity now.

What we’re watching for: Clear policy statement on SST treatment for elderly care services, regardless of facility type.

2. Increase the RM10,000 Nursing Home Tax Relief?

Current law allows RM10,000 annual tax relief for parents’ medical expenses including nursing home care. But here’s the reality: at RM4,000/month for quality care, this covers just 2.5 months of the year.

What families need: Increase the relief to RM20,000–25,000 annually, or allow additional deductions specifically for MOH-licensed facilities that provide medical-grade care.

3. Infrastructure Funding for Quality Care Expansion?

Malaysia has only 19 MOH-licensed nursing homes for 33 million people. This severe shortage forces families toward JKM-registered centers—many excellent, but now burdened with 8% SST.

What the industry needs: Capital grants and tax incentives for facilities to upgrade to MOH licensing standards.

4. The Caregiver Crisis Funding?

The government promised 50,000 new skilled caregivers by 2030. We currently have a 3,000-caregiver shortage. Without funding for training programs, this remains an empty promise.

The reality check: About half of EPF members approaching retirement have savings below the RM240,000 recommended threshold. Government support isn’t keeping pace with the demographic crisis.

The One Question Every Family Must Ask

Before choosing any nursing home or elderly care center, ask this:

“Are you licensed by the Ministry of Health under Act 586, or registered with JKM under Act 506?”

Then ask the follow-up:

“Do Malaysian citizens pay SST on your services?”

If they say “JKM-registered” and “Yes, we charge 8% SST”—that’s an extra RM280/month on a RM3,500 bill. Over years of care, this adds up to RM16,800+ over five years.

If they say “MOH-licensed”—Malaysian citizens pay zero SST. Plus you get full-time medical staff, hospital-grade safety standards, and comprehensive healthcare oversight.

Not all nursing homes are created equal under Malaysian tax law. Your family deserves to know the difference.

What BIGTREE Offers as One of Malaysia’s 19 MOH-Licensed Facilities

At BIGTREE Medicare & Nursing Home, our MOH license under Act 586 means your family benefits from:

✅ Zero SST for Malaysian citizens on all services—potentially saving you RM3,360+ annually

✅ Full-time medical team including family medicine specialists and wound care experts

✅ Advanced rehabilitation equipment including robotic neuro-rehabilitation technology

✅ Dietitian-supervised nutrition with personalized meal planning

✅ Hospital-grade clinical standards within MOH licensed facilities

We don’t just provide care—we provide healthcare. And under Malaysian law, that distinction saves families thousands of ringgit while ensuring medical-grade quality.

The Bottom Line

What won’t change regardless of future budget announcements:

The SST exemption for Malaysian citizens at MOH-licensed healthcare facilities is law. Right now. Today.

If your family is comparing elderly care options, this tax difference alone could save you over RM16,800 across five years of care—while guaranteeing access to licensed doctors, nurses, and hospital-grade medical standards.

Your parents worked their entire lives. They deserve care that honors their dignity without taxing their retirement savings twice.

Schedule a Consultation

📞 Call: +6012 685 5103
🌐 Visit: www.bigtree.care
📍 Location: 1, Jalan Pinggiran Kota Laksamana, Pusat Perniagaan Kota Laksamana Jaya, 75200 Melaka

Disclaimer

This article provides information on current SST regulations as of December 2025. Tax policies are subject to change. The regulatory references cited include P.U. (A) 172/2025 (Service Tax Regulations Amendment), JKDM Guide on Private Healthcare Services Version 2 (1 July 2025), and the Service Tax Act 2018. Facility counts sourced from CKAPS (October 2025) and JKM (November 2025).

Consult qualified tax and healthcare professionals for advice specific to your family’s situation. For official SST information, contact JKDM Bahagian Cukai Dalam Negeri at 1-300-888-500 or visit mysst.customs.gov.my.

BIGTREE Medicare & Nursing Home is licensed by the Ministry of Health Malaysia under the Private Healthcare Facilities and Services Act 1998 (Act 586).

© 2025 BIGTREE Medicare & Nursing Home. All rights reserved.