KUALA LUMPUR (July 17): Not all products and services will be imposed the sales and services tax (SST) due to be revived on Sept 1 this year, said Finance Minister Lim Guan Eng today.

A statement by Lim today also said that the sales tax, which will be applicable to selected manufactured and imported products, will have two different rates of 5% and 10% for different products.

“The 6% service tax applies to selected services and not all services, unlike the goods and services tax (GST),” said Lim.

GST of 6% tax rate was implemented by the Barisan Nasional administration during Datuk Seri Najib Razak’s tenure as Malaysia’s seventh prime pinister. It was zero-rated on June 1, and is set to be repealed, fulfilling one of the Pakatan Harapan government’s election promises.

Lim’s statement came in response to an earlier statement by Najib that the GST burdens people less compared with the SST, which it replaced in 2015.

Lim, in his response said that simply adding up the sales tax and services tax would be “equating apples with oranges”.

“The sales tax is imposed on manufacturers’ and importers’ price, while the GST is imposed on the final consumer price.

“Hence it is wrong to claim that a 10% sales tax is higher than a 6% GST,” he said.

“How could the SST burden the people more than the GST when the expected collection from the SST is estimated at only RM21 billion for a full year, while the GST had expected to collect RM44 billion in 2018, according to the previous government’s projection,” he added.

Additionally, Lim said that the Ministry of Finance (MoF) has conducted a “comprehensive SST review exercise” with the assistance of accounting firm PricewaterhouseCoopers (PwC) to simplify the impending tax.

“PwC will help rationalize tax collection and reporting requirements to ensure that the SST will be even more efficient and less bureaucratic than the GST, or even the old SST system,” said Lim.

Lim added that the new SST is designed to ensure that its impact towards the lower income group will be “proportionately less”, and that the details will be announced when the SST Bill is tabled in Parliament during the current Dewan Rakyat sitting, which started on Monday.