‘SST TO HAVE NO MAJOR IMPACT ON SERVICES SECTOR’
KUALA LUMPUR: The implementation of the Sales and Services Tax (SST) beginning today is not expected to make a major difference in the price of services.
According to tax expert Norsa’adah Ahmad, this was because the six per cent tax imposed on services, such as those provided by hotels, insurance, and food catering companies, was the same as those imposed by the Goods and Services Tax (GST).
“There should not be much difference with the previous price scenario. Most prices will remain the same.
However, Norsa’adah, who is also a member of the Malaysian Institute of Accountants, did not discount the possibility of double taxation on the price of food and drinks sold at food outlets.
She said a 10 per cent sales tax was imposed on certain products like canned drinks at the production stage and it was not impossible that restaurants would increase their prices to cover the service tax.
Among the services with SST charges are those provided by night clubs, private clubs, golf clubs, casinos, lotteries, telecommunications, paid television, legal services, accounting services, forwarding agents, architects, engineers, valuers, security, parking, car rentals, advertising, domestic services, information technology services, credit cards and electrical services.
Meanwhile, hoteliers do not expect an increase in room rates with the SST except for the usual increase during peak periods such as school holidays.
However, executive director of the Malaysian Association of Hotel Owners, Shaharudin M. Saaid said if the mechanism for the tax was the same as the previous SST, the room rates were expected to decrease.
“If the mechanism is the same as SST 1.0 before the GST was imposed, then room rates should be cheaper as the SST 1.0 did not impose a six per cent tax on service charges,” he said.