PETALING JAYA: The Customs Department has proposed exemptions on a long list of consumer goods including poultry, fish, milk, vegetables and various types of sugar when the Sales and Service Tax is reintroduced.
Other items in its 292-page exemption list range from bicycles to carriages for disabled persons and various types of orthopaedic appliances.
The reintroduced SST will kick in on Sept 1 to replace the Goods and Services Tax (GST), which will be scrapped.
Exempted goods will not be subject to the proposed 5% to 10% sales tax under the SST.
The Department has also drawn up a proposed list of services subject to a 6% service tax under the SST (see graphic).
These include hotels and homestay operators as well as Pay-TV, telecommunication, insurance and takaful service provi-ders.
This will mean, among others, that consumers will be charged a 6% service tax on their monthly Astro bill as well as on their insurance premiums.
The department has also proposed that a RM25 tax per annum be levied upon the issuance of every principal or supplementary credit or charge card.
Professional services such as legal, accounting, surveying, architectural, valuation and engineering will also be subject to the service tax.
Restaurant operators, including hawkers and food truck oper-ators, must also pay the service tax.
However, the SST will only be applicable to individuals and businesses that make more than RM500,000 annually.
Speaking at a media conference after opening a briefing session on the SST yesterday, Customs director-general Datuk Seri Subromaniam Tholasy and other officials explained that the department’s proposals would be scrutinised by the Cabinet.
The Cabinet will then submit the list of taxable services and exemptions for goods under the SST for tabling in Parliament.
Subromanaim said the SST would also take into account the B40 or bottom 40% households.
“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.
Subromaniam said the coverage of the SST would be much narrower compared with the GST.
Some 472,000 businesses were subjected to the GST while fewer than 100,00 would be affected by the SST, he said.
“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 would go up, Subromaniam said the SST was just one small component.
He said other factors such as fuel prices and the attitude of traders and businesses also played a role.
“We hope businesses don’t take advantage of the SST by raising prices,” he said.
He said his department was working with the Finance Ministry and the Domestic Trade and Consumer Affairs Ministry to monitor the situation.
Subromaniam also announced that Customs would roll out a nationwide engagement session with stakeholders on the SST, starting Monday.
The SST had been in place for decades but the previous Barisan Nasional government scrapped it and introduced a GST of 6% from April 1, 2015.
The Pakatan Harapan government, which promised to scrap the GST in favour of reintroducing the SST, then zero-rated the GST from June 1.
The list of proposed taxable services and exemptions for goods can be viewed in full at the Customs Department website at http://www.customs.gov.my