KUALA LUMPUR: Only 70,000 to 80,000 businesses are expected to be affected under the new Sales and Services Tax (SST), compared with 472,000 registered under Goods & Services Tax (GST), according to Royal Malaysian Customs Department director-general Datuk Seri Subromaniam Tholasy.
Speaking at a press conference after attending a seminar on SST today, Subromaniam said compared with the GST, the scope of coverage for the upcoming SST is much narrower, adding that it only covers 38% of the Consumer Price Index basket of goods, as compared to 60% by the GST.
“The government is aware of this and it is the government’s objective not to tax as broad as GST,” he added.
Subromaniam said the department has already started the engagement sessions with industry players last week after getting the approval from the Ministry of Finance.
“The number (of companies) to be registered under SST is very small compared to GST so it is very easy to manage. We will migrate those data (of the companies that are applicable under the SST) from MyGST to MySST system starting Thursday and we will inform the companies via email starting this week,” he added.
Additionally, Subromaniam said the tax rate and list of goods to be exempted from SST will be uploaded on Customs website next week. The SST is between 5% and 10%.
He also highlighted that the proposed SST will only involve 6,400 items (in terms of goods tax) compared with 11,197 items that were taxed under GST previously.
When the GST was introduced on April 2015, 553 types of goods and services were zero-rated, while another 25 were exempted from it.
Commenting on penalties, Subromaniam said the proposed SST will maintain the same punishments outlined in the GST, saying it is more enhanced compared to the old SST.
Meanwhile, Subromaniam said the department admits that there was an issue of delay in getting GST refunds previously that affected companies’ cash flows causing them to increase prices of goods and services.
“This single stage tax (SST) will not use the refund concept,” he added.
Source: The Sun Daily