SST is in effect – Five things you need to know about it

Malaysia’s Sales and Services Tax has kicked in which imposing a tas of 5% and 10% on the sale of goods, and a 6% levy in services with effect from last Saturday (1stof Sept 2018).

Again, it is placed on taxable goods manufactured by an individual or company with an annual turnover which exceeding RM500,000, and on taxable goods imported into Malaysia.

The Department has also drawn up a proposed list of services subjected to a (refer to the graphic below)

These include hotels and homestay operators as well as Pay-TV, telecommunication, insurance and takaful service providers. Also, professional services such as legal, accounting services (iCount accounting firm), surveying, architectural, valuation and engineering will also be subject to the service tax.

The proposed list is up but an study on requests for the sales and services tax (SST) to be exempted or reduced for various items is expected to be completed by the end of the year. However, Finance Minister Lim Guan Eng said an in-depth study had to be done on requests for exemptions or reductions as it would have a chain effect on other products.

To delve deeper, here are the five things to know about SST (we keep it sweet and easy):

1. The number of goods exempted from SST is ten times more than GST.

Only 545 consumer items were exempted from GST but with SST, a total of 5,443 items have been exempted.

2. Some daily essentialssuch as meat, eggs, vegetables and fruitsare exempted from tax.

There will also be no sales tax imposed on medicines and pharmaceutical products; as well as personal hygiene products like diapers and sanitary pads.

3.But you’ll still need to pay 5 or 10 percent sales tax on these items such asolive, sunflower and groundnut cooking oil, butter and more.

Mobile phones, cordless phones and laptops will also be subjected to the same amount of tax.

4.Services provided by hotels, insurance companies, telcos and professionals like lawyers and accountants are subject to a 6 per cent service tax.

5. Less businesses will have to pay SST compared to GST.

Customs Department director-general Datuk Seri Subromaniam Tholasy told media last week that the number of service tax-applicable businesses is 43.49 per cent compared to 65.85 per cent that were GST-applicable.

 

**Article source The Sales and Services Tax (SST) is now in effect – here are five things you need to know about it by Dylan Tan

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