Customs DG: SST is not 16pct, zero tax for majority of goods

Customs Department director-general T Subromaniam has reiterated Putrajaya's stand that the sales and services tax (SST) to be implemented will not amount to 16 percent in taxes for consumers.

Subromaniam said there are four tax categories under the SST, which should not be added together.

"The majority of goods will be zero percent tax, some will be five percent tax, and some will be 10 percent tax.

"Services will be six percent tax... Don't add them up," he said at a press conference in Kelana Jaya, Selangor, today.

The Customs Department has released an extensive list of goods that are tax exempt, including processed foods such as canned sardines and instant noodles.

The list of items that will be taxed five or 10 percent has yet to be finalised.

Services that will be taxed six percent include accommodation and hotels, insurance, dining, electricity, clubs, gambling and telecommunications services.

Subromaniam said the number of companies that will pay tax is expected to shrink from over 400,000 to around 100,000.

However, he is confident that those that need to pay tax will not be able to dodge the Customs Department as they have already been registered during the implementation of GST.

This will also make the migration of the tax databases easy, he said.

He said tax filing will not incur any cost to businesses, as it can be done online for free.

The SST is expected to be implemented on Sept 1, after Putrajaya moves to repeal the previous goods and services tax in Parliament.

The Customs Department will be holding talks with businesses nationwide, starting Monday, to get them accustomed to the change in the tax system. - Mkini