EY: Govt should ease challenges faced in implementing SST

KUALA LUMPUR: The government should ease some challenges faced by businesses in implementing the Sales and Services Tax (SST), Ernst & Young (EY) said.

In a statement on its expectations for the 2019 Budget, the tax consultancy firm said the government could, among others, set up a framework for blanket exemptions and introduce mechanisms to avoid tax-on-tax scenarios, where service tax may be charged twice on a single taxable service.

Other measures recommended by EY are standardising SST treatment of goods and services, with supplementary legislations and guides fine-tuned to be consistent with the SST Acts, and enhancing the MySST Portal to provide an easily accessible and user-friendly interface for any SST-related activities such as return submissions, payments and applications for exemption.

EY expects the government to introduce a tax on business-to-consumer digital services supplied by overseas providers given the rapid growth of the digital economy and e-commerce in Malaysia, adding this would contribute additional tax revenue.

It also hopes the 2019 Budget will give more focus to tax administrative policies that will provide transparency, certainty and effective delivery.

“One area to address is the speed of processing tax refunds, tax appeals, and finalising tax returns. Delays in the refund process can create uncertainty and impact cash flows and planning for businesses,” EY said.

Another key consideration was the prompt issuance of tax rulings and gazetting of legislations, it added.

EY also wants the government to provide greater certainty and clarity on certain tax treatments, particularly in terms of withholding tax implications, deductibility of expenditure, and whether a transaction is subject to income tax or real property gains tax.

Another area to be looked into, it added, was providing clear guidance and efficient implementation of tax policies that encouraged the growth of certain sectors or industries.

On the real estate sector, EY suggested the introduction of some measures and initiatives to tackle the housing affordability issue as well as imbalance and oversupply in the office space and retail market segments.

“The government could, among others, introduce some measures to control the pricing of the properties; re-introduce the personal relief on housing loan interest that was introduced effective from the year of assessment (YA) 2009 for three consecutive YAs to encourage the younger generation to own a home in Malaysia; and work together with Bank Negara Malaysia to study the housing loan requirements for firsttime home buyers,” it said. — Bernama