SST may hike cost of doing business for several sectors
PETALING JAYA: The re-introduced sales and services tax (SST) may likely increase the cost of doing business for several industries in Malaysia post-Sept 1, according to KPMG executive director for indirect tax practice Ng Sue Lynn.
Speaking to StarBiz after The Star’s empowerment talk on “Transitioning to SST”, she pointed out that the SST will be an additional cost for businesses in several sectors that are not exempted under the indirect tax regime.
“In comparison, the goods and services tax (GST) is a cost for the end consumers, rather than the businesses. This was because companies can claim back the input tax paid under the GST and pass the tax burden to the consumers,” said Ng.
Under the narrow-based SST system, a tax rate of 5% or 10% will be imposed on sales, unless the items are exempted. As for services, a rate of 6% will be charged on selected items such as telecommunications, electricity and pay-TV services.
Meanwhile, under the now-removed GST, a tax rate of 6% was applied previously on most goods and services except for those which are exempted or zero-rated.
Finance Minister Lim Guan Eng said earlier that only 38% of the Consumer Price Index basket of goods will be covered under the SST, in contrast to the 60% under the GST.
The Sales Tax Bill and the Service Tax Bill have been passed at the Dewan Rakyat and are expected to get approval from the Dewan Negara when it convenes on Aug 20.
Boardroom Business Solution head for tax services Helmi Hussain, who also spoke at the The Star’s empowerment talk, reminded businesses that were registered under the GST previously to file their input tax claim before the deadline.
“Any GST input tax, which has not been claimed, must be claimed within 120 days from the repeal date and will be considered final,” he said.
The Parliament passed the GST (Repeal) Bill 2018 on Aug 8.
Helmi also urged the Customs Department to provide more information on the adoption of SST soon, in order to facilitate businesses to transition effectively by Sept 1.
“With only about two weeks left, information must be shared quicker by the authorities in order for all businesses to know whether they are covered under the SST and for them to take appropriate actions,” he said.