KUALA LUMPUR: The government has introduced proactive measures to fine-tune and implement targeted sales and service tax (SST) exemptions for eligible construction projects, the Dewan Rakyat was told.
Deputy Works Minister Datuk Seri Ahmad Maslan (pic) said these exemptions include construction services related to residential buildings and public facilities such as places of worship, public toilets and recreational parks.
“The government recognises the importance of ensuring that the construction sector is not adversely affected by the implementation of SST.
“Therefore, we have taken steps to provide exemptions for specific categories of projects deemed eligible,” he said on Monday (Jul 28).
Yusuf Abd Wahab (GPS-Tanjong Manis) asked about the types of construction projects that are exempt from SST, and the ministry’s approach to ensure that ongoing developments are not disrupted.
Ahmad said certain business-to-business (B2B) activities are subject to specific conditions.
For example, while main contractors may be subject to SST, subcontractors involved in projects valued below RM1.5mil are exempt.
Additionally, he said essential construction materials such as cement, gravel and sand remain zero-rated for sales tax as part of the government’s effort to support the sector.
He also said there are currently no plans to increase the SST threshold, which will remain unchanged.
“There have been no discussions to raise it to RM3mil,” he said.
On project timelines, he stressed that the ministry does not tolerate delays.
“We do not like late work. After two or three extensions of time (EOT), the companies involved will be fined daily.
“Once they are penalised, they will not be awarded future projects,” he said.
