Putrajaya: The government has introduced proactive measures to refine and implement targeted exemptions from the Sales and Services Tax (SST) for selected construction projects, says Deputy Works Minister Datuk Seri Ahmad Maslan.
He added these exemptions included 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 told Yusuf Abd Wahab (GPS-Tanjong Manis) who asked on the types of construction projects exempted from SST, and the ministry’s approach to ensuring that ongoing development projects are not disrupted by enforcement of the tax.
Ahmad added that certain business-to-business 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 under the sales tax in order to support the sector.
Ahmad also clarified that there are currently no plans to increase the SST threshold, which will remain unchanged.
“There are no discussions to raise it to RM3mil.
“Small-scale contractors such as those in categories G1, G2, G3 and G4 that do not exceed the RM1.5mil threshold are not subject to tax, as the threshold for construction works is set at RM1.5mil,” 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, the companies involved will be fined on a daily basis.
“Once they are penalised, they will not be awarded future projects,” he added.
