SST should not end the party

The issue of the implementation of the sales and service tax (SST) come Sept 1 has been a subject of contention, especially of late with the deadline drawing nearer.

Many are concerned that profiteering will creep in with a vengeance and consumers will end up paying more under the SST regime.

Experience has shown that whenever the government changes tax policies, there are many sellers who will be unscrupulous enough to take advantage of the situation and hike up prices in the name of “rising costs”.

The government should have some mechanism in place to monitor such situations. The unethical ones must be weeded out.

Then, there is the issue of companies now calling for the government to reimburse them the outstanding GST input tax refunds before implementing the SST, according to a statement by the Federation of Malaysian Manufacturers (FMM).

“Based on the feedback received from over 100 FMM members in our survey conducted in July 2018, these companies collectively have yet to receive over RM220mil in input tax refund.

“If FMM’s 3,000-plus direct member companies are taken into consideration, the amount of refunds overdue to manufacturers could be much bigger. The delay in refunds has caused serious cash-flow issues for our members, especially SMEs, and continues to hurt exporters,” the federation said in a statement yesterday.

“While we appreciate the Finance Minister’s candid and transparent announcement that the government owes businesses RM19.4bil in GST refunds, FMM hopes for the approved refunds to be channelled back to members soonest possible,” it added.

Under the SST, some 43.5% of services will be subject to the tax, compared with 64.8% of services previously under the GST.

Essentially, this means that the government will have less revenue while consumers should get to save more as less goods are taxed.

Consumers are already feeling some effects of the lower cost of living. Hopefully the SST will not spoil the party.