Study on SST exemptions, reductions to be completed by year-end

The government has confirmed that the SST tax rate will be set at 10% for sales and 6% for services. It was one of most memorable PH promises to voters, in which they will sought to replace the GST with SST within 100 days of winning the 14th General Election.

But in truth, what does this spell for consumers once the Goods Service Tax is rendered zero-rated and that the Sales and Service Tax has returned to the fore?

Perhaps one of the most commonly discussed worries among the people of Malaysia is whether the directive of making the Goods Service Tax zero-rated to pave away for the return of GST would play a role in increasing the price of goods.

Regarding the latest news to-date, 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. 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.

Lim said engagement with stakeholders would be an ongoing process to address teething problems with the implementation of SST, which came into effect on Sept 1.

He said he had been attending briefing sessions being conducted nationwide by Customs to find out the problems faced by businesses and their feedback and suggestions.

Lim also said although there should be no major problems as SST was not a new tax system, there might be some confusion as the scope and threshold levels were different.

Before you end this, here are the key takeaways for you :-

  • The SST is levied at the consumer end while the GST is paid by all companies.
  • The GST, which stands at a flat rate of 6%, while the SST rates vary from 5-10% to specific rates.
  • The GST covers everyone, while the sales tax only covers manufacturers and services tax covers certain prescribed services like professional services.
  • The SST is payable when consuming good while GST is payable on every transaction between companies before reaching the end consumer.
  • The Sales Tax will only be imposed on the manufacturer or consumer level, while the Service Tax is taxed on consumers that are using tax services.

  

Article source: The Star Nation by Sharon Ling


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