‘MORE THAN 5,000 ITEMS EXEMPTED’
Price impact will be halved as taxable item coverage smaller, says Lim
MORE than 5,000 items will be exempted from the Sales and Services Tax (SST) compared with only 545 under the Goods and Services Tax (GST).
Finance Minister Lim Guan Eng said the government had identified 5,443 items that would be exempted from SST.
However, he said, the list had yet to be finalised.
“We will keep reviewing the rate and items, and if these will affect the economic wellbeing of the rakyat,” he said.
Lim said the price impact of SST would generally be half of what it was under GST, given that the former’s taxable items coverage was smaller.
GST, introduced by the previous government in 2015, had 11,197 taxable items, while SST would have 6,405.
Lim said the potential price increases should be under control, adding that the government had carefully formulated the exempted items to minimise people’s burden.
People, he said, would be less burdened by the consumption tax as SST covered only about 38 per cent of the consumer price index (CPI) basket compared with GST’s 60 per cent.
He urged the Customs Department to make it easier for the rakyat to pay the tax.
“The government provides service with a smile. Let us cooperate together.
“This is a friendly approach to make the taxation easy for the government and business players.
“This is effective in building confidence between the Customs Department and the people,” he added.
Lim said almost 80,000 businesses had registered for SST.
“With the reintroduction of SST, the government will collect RM21 billion per annum, compared with RM44 billion from the GST annually.
“The rakyat will get a benefit of RM23 billion in terms of tax savings with the implementation of SST,” he added.
During the three-month tax holiday, Malaysia incurred losses of more than RM10 billion after zero-rating GST in June, according to reports.
Lim said the government was expected to start paying the GST refunds to affected business operators by next year.
“We will find ways to source the payment,” he said, adding that the government was undertaking various measures to monetise its assets and reduce expenditure.
Lim acknowledged the shortfall of RM23 billion, but said the government was expected to offset the deficit by collecting more income from Petronas, Bank Negara Malaysia and Khazanah Nasional Bhd, as well as reducing operational costs.
The government, he added, was expected to rake in RM4 billion in SST collection towards the year-end, and targeted the full collection next year at RM21 billion.