PETALING JAYA: The formulation of the reintroduced Sales and Service Tax (SST), which will take effect from Sept 1, will take into account the B40 or bottom 40% households, said Datuk Seri Subromaniam Tholasy (pic).
The Customs Department director-general said the Government will in due course announce how the SST will consider the needs of low-income earners such as the B40 group.
“We will take into account the needs of the B40. There is some widening in the new SST compared with the old SST but not so much.
“At the same time, we also have revenue concern, so we have to strike a balance,” he said after opening a briefing session by the Customs Department on the SST to industry players and the media on Thursday.
According to Subromaniam, the new SST, which he describes as SST 2.0, will have a slightly bigger coverage of goods and services that will be taxed compared with the old SST.
However, he emphasised that the coverage of the SST will be much narrower compared with the Goods and Services Tax (GST).
Citing an example, Subromaniam said some 472,000 businesses were subject to the GST while less than 100,00 will be affected by the SST.
“Compared to the GST, the scope of coverage for the upcoming SST is narrower, so the SST is not expected to have the same impact (on consumers) as GST,” he said.
Asked whether prices of goods and services will go up due to the SST, Subromaniam said the SST is just one small component. He said other factors such as fuel prices and the attitude of traders and businesses also play a role.
“We hope businesses don’t take advantage of the SST by raising prices,” he said.
Subromaniam said his department was in consultation with the Finance Ministry and the Domestic Trade and Consumer Affairs Ministry to monitor the situation.
He said the SST will be a simpler system for businesses because of its smaller coverage as all filing will be done online compared with manually under the old SST.
Subromaniam also announced that his Department will roll out a nationwide engagement session with stakeholders on the SST, starting Monday (July 23).
He said the sessions are important because businesses need time ahead of SST's implementation.
“If we wait for the SST Bill to be approved in Parliament, it will take time.
“We expect the SST Bill to be passed sometime next month, near the end of the current Parliament sitting.
“It takes time, so we are informing businesses earlier on coverage, and tax rate, so that they will be ready."
Subromaniam also said the Department has released a list of items which it is proposing to be exempted from the SST tax.
However, he emphasised that the list only contains items which the Customs Department is proposing for exemption, adding that Parliament will make a final decision.
The list can be accessed here: http://www.customs.gov.my/
The Department has also uploaded a list of frequently asked questions on the SST which can be found at FAQ: http://www.customs.gov.my/
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