SST Malaysia at 10% for sales, 6% for services, says LGE

Finance Minister Lim Guan Eng today announced that the sales and services tax (SST) rate will be set at 10% for sales and 6% for services, with the bill on the tax expected to be passed in Parliament next month.

In his keynote address at the National Tax Conference 2018 at KLCC today, he said the SST was expected to bring in revenue of RM4 billion.

The government earlier said the SST would replace the 6% goods and services tax (GST) on Sept 1.

It expects to lose RM21 billion in revenue this year after zero-rating the GST on June 1.

However, the reintroduction of the SST, coupled with rising crude oil prices and extra dividends from government-linked companies, is expected to bring in an additional RM14.4 billion in revenue this year.

To fill up the gap left by the GST, Lim added, the finance ministry had identified RM10 billion worth of expenditure saving measures including downsizing and abolishing overlapping and non-urgent programmes.

Exorbitantly priced mega projects will also be cancelled or deferred, he said.

In his speech, he also said the Light Rail Transit 3 (LRT3) project had to be scaled down due to 1MDB and other financial scandals.

He added that there would be no more office raids accompanied by officers with firearms on companies accused of tax evasion.

“No more rough tactics like in the past. Such tactics are only for bad people,” he said.

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What is Sales & Service Tax (SST) in Malaysia?

Not sure what is SST in Malaysia? In today’s blog, we’re going to talk a lot about SST Malaysia, a tax system that is going to be implemented by our new government – Pakatan Harapan. A lot of things Pakatan Harapan wants to achieve in 100 days and one of it is to abolish GST (6%). I’m sure many of you are familiar with GST, which is a value-added tax levied on most goods and services sold for domestic consumption.

Did you know that the Malaysia’s customs department collected RM44bil from GST in 2017. And it was RM41bil in 2016.

With that being said, Pakatan Harapan will abolish GST and implement new tax system which is SST. So what is SST? You asked? Let’s keep reading.

What is SST?

Sales and Service Tax (SST) is a single stage consumption tax, levied, charged and paid on goods manufactured in Malaysia and imported.

It was first introduced on the 29th February 1972.

SST trends in Malaysia

We noticed there’s an increase in searching the keywords “SST” among Malaysia, according to the Google Trends.

SST Malaysia

The laws that governed the SST, which are the Sales Tax Act 1972 and the Service Act 1975, were repealed.

Dr M: GST out, SST in!

Tun Dr Mahathir Mohamad and Datuk Seri Wan Azizah at a news conference following the general election in Petaling Jaya May 10, 2018. — Picture by Razak Ghazali
  • Implemented since 1970s and has gone through few improments.
  • Sales tax will only be imposed at the manufacturer or consumer level. Service tax is imposed to consumers who are using tax services.
  • Some importers, manufacturers, wholesalers or retailers fail to declare their taxes through transfer pricing.
  • SST rates may vary, from 5% – 10% or specific rate (awaiting official announcement), plus 6% service tax.
  • Finance Minister Lim Guan Eng today announced that the sales and services tax (SST) rate will be set at 10% for sales and 6% for services, with the bill on the tax expected to be passed in Parliament next month. (updated)

SST at 10% for sales, 6% for services, says Lim Guan Eng

Finance Minister Lim Guan Eng announced that the sales and services tax (SST) rate will be set at 10% for sales and 6% for services, with the bill on the tax expected to be passed in Parliament next month.

We’ll keep you all updated through:

  1. Our Facebook page (SST Malaysia)
  2. Our Facebook group

Feel free to notify us in the comments section if you guys are ahead than us.

The differences between SST and GST

Below is the comparison of SST vs GST:

sst vs gst
SST vs GST Infographic

 

Download SST vs GST PDF

Conclusion

Malaysia’s government – Pakatan Harapan is going to abolish GST and replace it with SST. As for now, we do not have any clue about the GST in Malaysia yet. We’ll keep you all updated when we receive the official notice for the government.

Lastly, what do you guys think about SST? Feel free to discuss it in the comment section!

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