Malaysia Imposes 6% Tax on Foreign Medical Tourists

The Malaysian government has officially imposed a 6% service tax on foreign nationals seeking private healthcare services in the country, effective from 1st July 2025. This policy is part of a broader expansion of the Sales and Services Tax (SST), aimed at strengthening fiscal resilience and widening the national revenue base.

According to The Edge Malaysia, the new tax applies to foreigners receiving medical care, traditional treatments, and related health services such as physiotherapy and speech therapy at private healthcare facilities with annual revenues exceeding RM1.5 million.

Malaysian citizens, however, remain exempt from this tax—whether for conventional medical treatment or traditional practices rooted in Malay, Chinese, Indian, Islamic, homoeopathic, or osteopathic traditions. The exemption reflects the Madani government's commitment to safeguarding locals from rising healthcare costs.

Despite its intent, the policy has raised concerns within the healthcare sector. The Association of Private Hospitals Malaysia (APHM) noted that the sudden implementation poses operational challenges for hospitals.

"APHM has submitted a formal request to the Ministry of Finance, urging a postponement to ensure a smoother transition and to prevent disruption to patient care," the association stated.

Hospitals, they argue, require time to adjust their administrative systems, billing processes, and compliance procedures to meet the new regulatory demands effectively.

Additionally, APHM is calling for further clarification on how the tax will be applied—particularly whether it extends to professional fees for medical practitioners and how it affects long-term foreign residents in Malaysia.

Read also: Kuala Lumpur’s Best Hospitals