More than 77,000 traders have registered under SST
KUCHING: More than 77,000 traders have been registered under the Sales and Service Tax (SST) that will come into effect on September 1, said Customs director-general Datuk Seri Subromaniam Tholasy.
Their registration was done through automatic transfer from the Goods and Services Tax (GST) system that the SST would replace and the traders had been informed via email, he added.
“Of the total, 32,577 have been registered for the sales tax and 44,874 for the service tax. This indicates that the compliance cost will drop because it is not necessary for most of the traders to register under the SST, only manufacturers of certain goods and providers of services,” he said during a SST Handholding Programme held here yesterday.
With less than a week before the start of the SST, Subromaniam said that the Customs office will be doing their best to help business owners prepare themselves for the SST by running courses for business owners and helping each one resolve any issues or questions.
“There will definitely be transitional issues, such as people still being owed from the tax holiday, but that will be handled separately. The SST will take off first come Sept 1,” he said.
First on the agenda is to ensure localbusinessownersarecorrectly registered with Customs Malaysia as SST-registered entitles or SSTexempt entities.
While the SST registration is automatic, Tholasy said that there are still chances of mistakes in the process.
“There is a chance that you could be registered wrongly so it is best to check your status. This is because the process is automatic and may end up with mistakes in registrations if there is any mistakes or wrong entries of the company in the system or if they have yet to be identified.”
Of the total, 32,577 have been registered for the sales tax and 44,874 for the service tax. This indicates that the compliance cost will drop because it is not necessary for most of the traders to register under the SST, only manufacturers of certain goods and providers of services.
For the few unlucky ones that the system has misclassified or missed out, Tholasy urged that they register themselves online.
“My officers are available to help if need be but, it is a very easy process to register yourselves online. And please do not want any longer to do so as it may hinder your business activities if you do not have a certificate of exemption.”
Additionally, he added that the penalties for under-reporting has also increased in order to boost compliance from businesses owners.
“In the past you could be charged a fine of RM50,000 irrespectively of how much tax you actually evaded, however now the penalties will be much higher and the minimum cost for fines will be 10 times of the tax evaded and or five years imprisonment.”
“The message is very clear – this new government is all about transparency so do not cheat.”
That being said, smaller businesses need not fret as Tholasy guided that only manufacturers, wholesalers or importers and providers of services that make RM500,000 and above annually need to register themselves under the new SST 2.0.
Service providers that must pay the 6 per cent service tax are: hotels, insurance and takaful providers, F&�� businesses, clubs, gaming services, telecommunications, paid- television, forwarding agents, legal services, accounting, surveying, architectural, valuers, engineering, consultancies, employment agencies and security service providers.
When asked whether the SST would be effective in lowering the cost of goods, Tholsasy reasoned that as the umbrella of taxable companies under SST is 10 times smaller than the umbrella seen in the previous GST, the SST will likely not have much of an impact in rising costs.
“However, in saying that, there will be news of prices going up and down and I do not want to comment on if the SST is the culprit behind it. ��ecause the cost of goods is a multi-faceted situation and is dependent on a wide-range of factors and not just the tax component alone.”
According to Tholasy, one thing that people tend to always forget is the basic economic concept of ‘supply and demand’, and with the intense demand from consumer right now due to the tax holiday, it is expected that prices will remain high for now until the markets readjust themselves.
Datuk Seri Subromaniam Tholasy, Customs director-general