IPOH, Sept 1 — Entrepreneurs who have yet to register their business with the government should do so soon if they want to be able to charge their patrons the 6 per cent service tax, Finance Minister Lim Guan Eng said today.
He warned that those who fail to do so would be forced to bear the cost of the tax on their own as the new sales and services tax (SST) takes effect from today.
“If they are supposed to pay taxes and they do it late, then they have to pay the 6 per cent tax using their own money, because they can’t collect from the customers anymore,” he told reporters after attending a briefing session on the SST at Excelsior Hotel here.
He said that under the law, the government can already penalise business operators who have yet to register for the SST since the new tax system is already gazetted.
“But we would not do it. We will use a soft, pleasant, and people-oriented approach in implementing the SST system.
“It’s just that they have to bear the SST on behalf of the customers if they delay the registration. I don’t think they want to pay the SST on their own, so it’s better to do things quickly,” he added.
The Pakatan Harapan federal government introduced a sales tax of between 5 and 10 per cent on some 5,000 consumer goods and a 6 per cent tax on services after repealing the previous 6 per cent goods and services tax (GST) on a wide array of items consumed that was rolled out in 2015.
Lim did not give a deadline for registration when asked.
The minister warned businesses in the food and beverage industry against taking advantage of the SST to raise the prices of their menu items, saying the government will be keeping a close watch on attempts at profiteering.
“SST will only be collected from restaurants, coffee shops and other eateries like mamak outlets earning above RM1.5 million in annual sales. Only these eateries may increase the prices.
“But, for those who are not subjected to SST, please don’t raise the price simply. We will take necessary action to avoid profiteering,” he said.
Lim also said he expects only a minimal price hike on items after the SST kicks in, compared to the GST.
“Under GST 11,197 goods were subjected to tax, but under SST only 6,405 goods were subjected to tax. So the difference will be huge and not all products are taxed,” he said.
Customs director-general Datuk Seri T. Subromaniam who was also present for the briefing said his department has started collecting SST on imported goods since 12am today.
“The system is working fine and we have collected SST on imported goods from 5 per cent to 10 per cent.
“However, if the business operators are facing and technical problems, we urge them to visit the nearest Customs Department for help,” he said.
Subromaniam also said that there are still some business operators in the services sector that had registered for the GST when it was introduced but had not yet updated their status.