SST will not kick in im­me­di­ately

The Star Malaysia - - Nation - By HEMANANTHANI SIVANANDAM and YUEN MEIKENG news­desk@thes­tar.com.my

PETAL­ING JAYA: The Sales and Ser­vices Tax (SST) will not kick in im­me­di­ately once the Goods and Ser­vices Tax is ad­justed to 0%.

The im­ple­men­ta­tion of the SST de­pends on when the Gov­ern­ment would make a de­ci­sion on it, said Cus­toms De­part­ment di­rec­tor-gen­eral Datuk Seri T. Subro­ma­niam.

“But Cus­toms will make sure the op­er­a­tional is­sues are min­imised and we have a smooth tran­si­tion,” he said yes­ter­day.

On Wed­nes­day, the Fi­nance Min­istry an­nounced that goods and ser­vices sub­jected to GST would be zero-rated from June 1.

The min­istry said the re­duc­tion of GST rate from the cur­rent 6% to 0% would be im­ple­mented na­tion- wide un­til a fur­ther an­nounce­ment was made.

Cus­toms, said Subro­ma­niam, had also up­loaded a list of “Fre­quently Asked Ques­tions: Tran­si­tional 6% to 0%” on its web­site for con­sumers and traders to bet­ter un­der­stand the changes in the taxes.

Restaurants, re­tail­ers and hous­ing de­vel­op­ers wel­comed the move to set GST to 0%, adding that it would spur con­sumer growth.

Malaysian Mus­lim Restau­rant Own­ers As­so­ci­a­tion pres­i­dent Ay­oob Khan Muhamad Yakub said he was pleased with the move.

He said the food in­dus­try was badly af­fected by the in­tro­duc­tion of GST as con­sumers had to bear the brunt.

“With the lift­ing of GST, we are pretty sure the food busi­ness will im­prove and fur­ther­more, the rakyat will en­joy food at lower prices.

“Food op­er­a­tors should also abide by the zero-rat­ing di­rec­tive and im­ple­ment it on the date set,” he said.

Real Es­tate and Hous­ing De­vel­op­ers’ As­so­ci­a­tion Malaysia (Re­hda) pres­i­dent Datuk Seri Fateh Iskan­dar Mo­hamed Man­sor said the move was lauded be­cause Re­hda had been push­ing for ma­te­ri­als used in build­ing af­ford­able homes to be ex­empted from the tax.

“How­ever, we will still need to dis­cuss in-depth with our mem­bers and tax con­sul­tants on the rein­tro­duc­tion of SST,” he said.

Fateh Iskan­dar said the new move would def­i­nitely de­lay the de­ci­sion of con­sumers in buy­ing “big ticket” items like houses un­til June 1.

“By then, prices of con­struc­tion ma­te­ri­als should be re­duced. But we hope con­trac­tors will not prof­i­teer by in­sist­ing on main­tain­ing high prices,” he said.

Malaysian As­so­ci­a­tion of Hotels pres­i­dent Sam Cheah said the in­dus­try was wait­ing for more in­for­ma­tion on im­ple­ment­ing SST.

“The prices of ho­tel rooms and ser­vices will de­pend on whether or not we need to charge ser­vice tax as we did prior to GST.

“There will not be an im­me­di­ate change in de­mand as there are other is­sues to be ad­dressed such as il­le­gal op­er­a­tors, hu­man cap­i­tal and tourism tax,” he added.

SME As­so­ci­a­tion of Malaysia pres­i­dent Datuk Michael Kang said the mech­a­nisms of the new sys­tem to re­place the GST might cause some confusion.

“We need to keep an eye on the new mech­a­nism and how the SST works. We need to wait for the Fi­nance Min­istry to an­nounce the new sys­tem,” said Kang.

He said those not reg­is­tered un­der GST would also face chal­lenges as pre­vi­ously pur­chased goods would in­clude the con­sump­tion-based tax.

“So, if con­sumers go to a shop not reg­is­tered for GST, the prices will be higher, (and) it will be con­fus­ing.

“Let’s see how this works and if the Gov­ern­ment will have some ways to help the traders,” he added.

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