More money, more bite

The Sales and Service Tax promises to be easier on the pocket and tougher on wrongdoers. Compared with the Goods and Services Tax, fewer items will be taxable when the SST is reintroduced on Sept 1. And the penalties for those who evade the taxes will be

KUALA LUMPUR: Malaysians are expected to have more money in their pockets under the Sales and Service Tax (SST) system than when they were paying the Goods and Services Tax (GST).

This is because when SST is reintroduced in place of the GST next month, the number of taxable items will be significantly lower compared with the long list of goods and services that attracted GST.

A total of 6,400 goods will be subject to sales tax compared with 11,197 goods under GST, said Customs director-general Datuk Seri Subromaniam Tholasy.

“This is based on the tariff numbers we proposed,” he told reporters after a seminar yesterday.

“If we look at the Consumer Price Index (CPI) basket of goods and services, under GST, 60% of the goods were taxed.

“Under SST, only 38% of the goods (will be taxed),” he said, adding this would help the people, especially the B40, that is, the 40% of households in the bottom income category.

He also said the services subject to service tax would be fewer than those that had GST, but he did not give any figures.

Subromaniam said Customs would start transferring data from its MyGST system to the MySST system tomorrow as part of preparations for the return of SST on Sept 1.

He said the department estimated that 70,000 to 80,000 companies would be registered under the SST regime compared with 470,000 companies under the GST system.

“These companies, mainly manufacturers and service providers, will be informed through email, starting this week,” he said.

Subromaniam said the SST list of taxable and exempted items would be finalised next week.

Customs has begun reaching out to businesses, including holding briefing sessions, to ensure a smooth transition from GST to SST.

“We have engaged with and trained 5,000 companies so far. Hopefully, we will cover the rest in a month’s time,” he said.

On penalties provided in the legislation for SST, Subromaniam said they were comparable with those for GST.

“The penalties are the same under the GST Act. But now we will focus on how to assist businesses in the implementation of SST, and not too much on penalties,” he said.