SST to boost purchasing power of Malaysians: Expert

PETALING JAYA: The purchasing power of Malaysians will be boosted with the reintroduction of the Sales and Services Tax (SST) in September, said KPMG Tax Services Sdn Bhd Indirect Tax Advisor Datuk Tan Sim Kiat.

He said the SST was a single level tax compared with the just zero-rated Goods and Services Tax (GST) which was charged at every stage of business transaction.

“A single level tax will put less burden on consumers and boost spending power further although the government might be on the losing end by foregoing extra revenue under the GST regime,” he told a press conference yesterday after a briefing by KPMG and the Royal Customs Malaysian Department to business owners on how to file their taxes after the GST was zero-rated on June 1.

Last year, the government collected about RM44 billion in revenue from the implementation of the GST and with the SST in the pipeline, the government was only expected to accrue approximately RM30 billion in revenue, annually.

However, to date, how the SST mechanism would be implemented is still unknown as studies are still being conducted by the Finance Ministry and its related agencies.

The reimplementation of SST would also have to be tabled and passed in the July sitting of the Parliament, which would also repeal the GST Act 2014.

Tan also said the SST was a simpler and better tax model for Malaysia’s current economic situation.

“Prices will drop. However, there are various factors that cause prices of goods to go up. Consumers need to understand that SST will only apply to manufacturing and services industries. It will not affect everyone, compared with the GST which is broad-based,” he said. – Bernama