Deputy International Trade and Industry Minister elaborates on the SST

KUALA LUMPUR: It is wrong to calculate the overall impact of the Sales and Services Tax (SST) by combining the 10% sales tax and 6% tax for services, said Deputy International Trade and Industry Minister Ong Kian Ming.

“Sales tax isn’t imposed on products manufactured by factories, while service tax is only for services.

“So, we cannot combine it into 16%,” he said to reporters when met at the Parliament Lobby on Tuesday (July 17).

The Bangi MP assured Malaysians that there won’t be a higher cost of living after the SST is implemented in Sept.

“The overall impact would be a lower cost of living.”

Ong, who formerly served as a Special Officer under the Finance Ministry, said that there is a lot of confusion surrounding the issue.

“There are a lot of items that are affected by the Goods and Services Tax (GST) but exempted from the SST. I think there is a minor confusion of the scopes between these two taxes at present.

“We will soon organise a briefing to advise all MPs on issues related to SST and how it is different from GST.

Ong pointed out the benefits of reintroducing the SST, as only RM21bil will be collected from SST, compared to RM42bil under the GST.

“I think this will still be beneficial because it will be returned to the people,” he added.

The SST is expected to be implemented on Sept 1 after the necessary laws are passed in the current Parliamentary session.

Services will be taxed at 6% and the sale of goods will incur a 10% tax.