Under the Service Tax Act 2018, the provision of electricity is prescribed as a taxable service subject to 6% Service Tax. As a registered taxable entity, TNB is compliant to charge Service Tax for the provision of electricity.

First Schedule (Regulation 3) of the Service Tax Regulation 2018 explicitly outlines the supply of electricity to any Residential Customer (Tariff A – Domestic). This exclusion applies to the first 600 kWh for a minimum period of 28 days per billing cycle consumed by the customer, effective from 1 September 2018.

The 28-day billing rule applies, wherein the entire consumption will be charged Service Tax if the billing period is less than 28 days.

The Service Tax amount will be explicitly indicated in the electricity bill issued to the customer for items subject to ST.

The billing components related to consumption (kWh) is subjected to Service Tax are:

Following the announcement by the Prime Minister during the Budget 2024 on 13 October 2024, the Service tax rate will increase from 6% to 8%, starting 1 March 2024. excluding services related to food and beverages and telecommunications. The new Service Tax rate has been gazette under Service Tax (Rate of Tax) (Amendment) Order 2024.

Starting from 1st March 2024, Residential customers with consumption exceeding 600 kWh or RM 231.80 and a billing period is 28 days or more will be subject to a Service Tax (ST) rate of 8% on their TNB electricity bills.

The Service Tax on the electricity bill for the months of February and March 2024 will be calculated proportionally, taking into account the number of billing days with both the previous Service Tax rate of 6% and the new rate of 8%.

As a taxable entity, TNB is obligated to apply the Service Tax as stipulated in the Service Tax Act 2018. The collected tax received will then be remitted to the Royal Malaysian Customs Department. For more information about Service Tax, you can visit the Royal Malaysian Customs Department website at mysst.customs.gov.my

RE Fund (KWTBB) is a fund collected by the Government through consumer’s electricity consumption. The Fund will be used to promote growth of electricity generation from renewable energy resources.

In line with the Renewable Energy Act 2011 (RE Act 2011), the Renewable Energy (RE) fund (KWTBB) is collected through a surcharge of consumers’ electricity consumption at the rate of 1.6%.

TNB is only the collecting agent of the fund for the Government.

Surcharge of RE Fund (KWTBB) applies to all customers except for domestic customers with electricity consumption of 300 kWh @ RM 77.00 and below per month.

RE Fund (KWTBB) surcharge is calculated as follows: RE Fund (KWTBB) Surcharge = 1.6% × [(kWh+kW) – Discounts]

The RE Fund (KWTBB) collected from the customer’s electricity bill is channelled to the Government (SEDA - Sustainable Energy Development Authority). For more information, you can visit this website: seda.gov.my

When it is imposed
The penalty charge will be imposed if payment is made later than 30 days after the bill date

How it is calculated
The amount is calculated based on 1% (simple interest) of the outstanding bill amount, multiplied by number of days outstanding.

Waivers
This penalty cannot be waived unless proven to be an administrative error on TNB’s part.

How to Avoid it
Please pay your bill within 30 days from the bill date.

Proration factor applied by TNB will benefit the customers whose meter is read above 31 days.

Any billing period above 31 days will be prorated.

Proration Factor = Number of billing days / 30

Prorated Factor will be multiplied with each tariff block. Customer will benefit lower rate for expanded consumption block range.