SST may be introduced as early as September

The sales and services tax (SST), which will replace the goods and services tax (GST), may be implemented as early as September.

Ong Kian Ming, the special officer to Finance Minister Lim Guan Eng, said this in an interview with BFM.

"(We are looking at) the possibility of introducing the SST very soon, perhaps in the month of September..." he said in the radio interview.

The GST will be zero-rated effective June 1, which will give a three-month tax holiday if the new tax regime only comes into effect in September.

Ong said the tax holiday is akin to a stimulus measure for the economy.

"There will be a lot of people who would be going out to buy cars (for example) in the month of June because there will be an effective tax holiday while we are waiting for the SST.

"So that would be sort of a gift by the new government to the Malaysian people," he said.

While there had been debate over whether the new tax regime will increase or reduce the prices of goods, Ong pointed out that the government will be collecting significantly fewer taxes under the SST.

"Let's look at the amount of revenue collected from GST which is over RM40 billion versus the amount of revenue under SST which is roughly RM20 billion to RM25 billion.

"There is a big difference and the difference will be returned to the rakyat," he said.

Prior to the six percent GST rate, Malaysians were paying an SST of 10 percent.

Ong said the new government will likely stick with the old SST rate.

"I hope people will not get confused by GST at six percent versus SST at 10 percent as SST was not charged on all goods and is only charge at the manufacturing stage and not at the consumption stage," he said.

Ong said the Customs Department is prepared for the implementation of the SST.

"They are fully ready to implement the SST system although there may be some changes compared to the past.

"Some of the processes may be a bit cumbersome as you have a lot of forms to seek for exemption and we may make it more streamline so there are less forms to fill.

"We may also reduce the number of exemptions so that there are no grey areas where people can try and lobby or influence the ministry for exemptions," he said. -Mkini