GEORGE TOWN: The re-introduction of the Sales and Service Tax (SST) may benefit house buyers more compared to the Goods and Services Tax (GST), said the Penang Electrical Merchants Association.
Its president Khaw Tatt Siew said the 10% SST is a one-off charge which only applies to the manufacturer, supplier or contractor.
In comparison, he added, the 6% GST was applied at all stages, from the raw materials to the manufacturer, supplier and contractor.
“An example is the price of a RM100,000 property, which would cost RM106,000 with the addition of GST for buyers, but the 10% SST does not apply to the RM100,000 price tag.
“Our members, comprising many contractors, have calculated a 1% to 2% increase in our total contract sum when the SST is reinstated.
“The contract is for work such as wiring, light installations or the laying of cables for the construction of condominiums, hospitals and other buildings,” he said during the PEMA Academic Awards 2018 presentation yesterday.
Khaw said the SST is unlikely to affect the end user much.
“The developers will possibly absorb the increase to boost their sales in view of the slow property market,” he said.
This year’s academic awards saw a total of 47 scholarship recipients.
PEMA education fund committee vice-chairman Datuk Seri Hong Yeam Wah said this included primary, secondary and pre-university recipients.
On July 16, Finance Minister Lim Guan Eng announced that the provision of services would be taxed at 6% while the sales of goods would incur a 10% tax under the SST.
The new SST starts on Sept 1.