KUALA LUMPUR: The re-introduction of the Sales and Services Tax (SST) or SST 2.0 will see a smooth implementation come September 1, with both the Royal Malaysian Customs Department and local businesses working together to enable a more effective tax collection for the country and benefiting the nation.
Deputy Director-General of Customs Datuk Paddy Abd Halim said the department would do its utmost to help manufacturers by guiding them so that both parties would interact in a friendly manner.
“We have received overwhelming response from the companies and they are showing great interest, making sure that they can comply with whatever rules and regulations set by the government,” he told Bernama in an interview today.
He said the Customs Department had earlier targeted some 78,000 companies to be registered under the SST regime compared with 470,000 companies registered during the six per cent Goods and Services Tax (GST) era.
However, as at Aug 16, some 79,966 companies had registered for the one-stage tax as some companies have come onboard to voluntarily register their businesses.
Paddy said although the tax collection from the SST would likely be a bit lower at RM21 billion compared with the RM44 billion collected under GST, what is more important for the government is the wellbeing of the nation.
He explained that the GST was a multi-stage tax system, whereby it was collected on the value-added and production stage and until the retail stage.
Therefore, there were taxes at every stage whereas the SST is a single-stage tax which applies only at the manufacturing level, he said.
“Meaning, only goods that are taxable and manufactured will be charged sales tax at the manufacturing level. You can say it is a much simpler process as compared to the GST,” he said.
As reported, the Pakatan Harapan government has delivered one of its key election promises with the abolishment of the GST, which was implemented in April 2015 at six per cent.
Since June 1, 2018, Malaysians have been enjoying the zero-rated GST while
the government has been working towards the enforcement of the SST.
Last week, the Dewan Negara had passed five bills related to the implementation of the SST – Sales Tax Bill 2018, Service Tax Bill 2018, Goods and Services Tax (Repeal) Bill 2018, Customs (Amendment) Bill 2018 and Free Zones (Amendment) Bill 2018.
These were approved without amendment after a majority voice vote.
This Saturday (Sept 1), Malaysia will be imposing a tax of between five and 10 per cent on the sale of goods and six per cent on services.
On challenges in implementing the SST 2.0, Paddy said he expected no major problems except for new businesses which may not have the experience of using the tax while some may still be clueless whether their goods are taxable or not.
Due to this, he said the Customs Department, after having organised hundreds of hand-holding programmes for companies nationwide, would continue its effort until the second week of September.
“Because we have simplified the (exemption) process, there could be issues whereby businesses abuse the system, but if there is, it should be minor. We don’t expect everyone to abuse the system and we placed trust in the businesses,” he said.
The department announced that the number of consumer goods to be exempted from the sales tax was 10 times the number of goods exempted under the GST.
A total of 5,443 consumer items have been exempted from the sales tax, set at 5.0 per cent or 10 per cent.
Among the items that will not be taxed include live animals and daily food items like rice, cooking oil and bread.
In preparing the businesses and public ahead of the SST implementation, the department has uploaded information on its website at www.customs.gov.my and welcome any questions about the tax at call centres 1-300-888 500 from 8.30 am till 12 am. - Bernama © New Straits Times Press (M) Bhd