Ease of computing tax is biggest SST benefit — SME Sabah
KOTA KINABALU: The biggest benefit for businesses with the reintroduction of the Sales and Services Tax (SST) is doing away with the more complicated input and output tax mechanism of the previous Goods and Services Tax (GST), said Small and Medium Enterprise Association of Sabah (SME Sabah) president Foo Ngee Kee.
He said calculating the SST was just a matter of multiplying the revenue by six per cent (for services).
"The biggest benefit is the ease of computing the tax as we no longer have to record input and output tax," he said when asked to comment about Finance Minister Lim Guan Eng's announcement of six per cent tax for services and 10 per cent for the sale of goods under SST which will be implemented on September 1.
For the hotel sector, Foo said there should not be any changes to room prices as the services under SST was taxed at the same rate of six per cent as GST.
Foo, who is also the director of Courtyard Hotel at 1Borneo Hypermall, said the hotel has even lowered its room rates by six per cent during the tax holidays when GST had gone zero-rated on June 1.
Nonetheless, he said some restaurants or hotels may collect 10 per cent service charge as incentive for their staff, which is unrelated to SST.
He said the scope of the SST may be less than GST, adding that the SST would have varying impact on different sectors.
For example, Foo said the sales tax on vehicles has increased from six per cent for GST to 10 per cent under SST.
He also expected no price hike for essential goods and at coffee shops which previously need not pay GST.