5,000 firms registered for SST in Sabah – Customs
KOTA KINABALU: Approximately 5,000 companies in Sabah are expected to register for the Sales and Service Tax (SST).
As of yesterday, about 1,800 companies have registered for the Sales Tax and another 2,100 companies for the Service Tax in the state - totalling up to roughly 4,000 registered companies.
Based on the current figure, Royal Customs Department Sabah CDN Deputy Director G. Deep Singh predicted that there would be a 10-20 per cent increase on the total number of registered companies in Sabah, which would mean that there would be at least 5,000 companies that would be affected by SST.
Singh explained that he could not give an exact figure as companies had been registering with the department on a daily basis, both through the office and through the system.
“Compared to the previous Goods and Services Tax (GST), there were about 20,000 companies that were registered. So now, under SST, the number has dropped to only around 4,000,” Singh told reporters when met during the Federation of Malaysian Manufacturers (FMM) seminar of SST at TH Hotel yesterday.
Singh encouraged all the manufacturers in the state to study the law as well as the exemptions provided to them, which he described as one of the advantages of SST.
“All the manufacturers can get exemptions. At the point of purchasing the raw materials, components, packaging materials, we have given them an exemption list under the Sales Act Exemption Order.
“They can claim the exemptions so when they purchase the goods, it would be free from Sales Tax. Of course, when they supply, they would have to charge the 10 per cent Sales Tax.
“The impact would be there, but it would be minimal and only on the manufacturing level. When you go to the traders and retailers, the impact would be lesser,” Singh said.
He highlighted the fact that there were thousands (a total of 5,445 items as of August 30) of items that were exempted under the SST, plenty more compared to number of items exempted during the GST era.
He also reminded the public that manufacturers with a threshold of less than RM500,000 would not be affected by SST.
Also present in the seminar was FMM chairman James Haa, who asserted that it would take at least months for one to assess the actual impact of SST on the manufacturing industry.
“For the time being, short term wise, the pricing for the manufacturing would not immediately increase. This is because they (a portion of the manufacturers) still have the old stock.
“Secondly, even those who wish to increase their prices would only be able to increase by a mere five to 10 per cent. This can only be seen after three months,” James said.
When asked whether the introduction of SST would give a positive impact on the industry, he pointed out that the main difference between SST and GST was that with the former, manufacturers could no longer regain the money from the government.
“This is as opposed to the previous GST regime whereby there are inputs and outputs, which means that manufacturers could get back the money paid to the government.”
In this regard, James opined that SST could actually be more beneficial to the consumers.
James added that companies could actually choose to absorb the sales tax.
“As a manufacturer, before we increase the price, we would want to see whether the market can accept it or not. We are worried that if we increase it too much, our products would move slower,” he said.