KUALA LUMPUR (July 17): The rate of the sales and services tax (SST) that will be imposed from Sept 1 is not 16% as wrongly assumed by some people, said Deputy International Trade and Industry Minister Ong Kian Ming.

Ong said the separate rates for the two categories of the SST, namely sales and services, should not be added up.

"There are two parts in the SST. The tax is 10% on manufactured goods and 6% on services, so we cannot look at it as 16% altogether," he told reporters at the Parliament lobby.

Ong also said the sales tax is incurred at the point of manufacturing, while the previous goods and services tax (GST) is incurred at the point of sales.

"Tax at point of sales will be higher than tax at point of manufacture level," he said.

He also said the revenue generated from GST was estimated to be RM42 billion for 2018, "but under SST, we are estimated to collect RM21 billion, so that is the good side of it, whereby about RM20 billion will remain amongst the people."

Ong, who previously served as special officer to the finance ministry, said the government will hold a briefing session for all members of parliament on the new tax system.

Yesterday, Finance Minister Lim Guan Eng announced that the SST will be implemented from Sept 1 and set at 10% for sales and 6% for services.