This article first appeared in The Edge Financial Daily on September 3, 2018

KUALA LUMPUR: The government will review the list of goods under the new sales and services tax (SST) and amend it by year end after it conducts a study on whether some goods should be taxed following feedback from the public, according to Finance Minister Lim Guan Eng.

“The full list has already been uploaded, but we need to make amendments. We need to impose the SST on Sept 1 (Saturday). I have no choice because we could be in a deficit if it is not implemented on Sept 1.

“After getting the views and requests of the people ... we will make another round of amendments and I hope the people will be patient,” he was quoted as saying by Bernama after a briefing on the implementation of the SST in Penang on Saturday.

He also said there were problems with food items that should not be taxed. The problem arose when they were grouped with others. “The problem was that all imported foodstuffs such as seafood like abalones as well as prawns were lumped in the same group, so we have to make the amendment. That is why we may take out some items, which ordinary people consume, and we will also study whether to reduce or increase the rate,” he said.

The Bagan member of parliament also admitted that there had been some confusion over the implementation of the SST.

As an example, he said, there were complaints from consumers who ate at restaurants such as nasi kandar shops which imposed a service tax of 6%. He said through the SST, the government had raised the threshold of the service tax to RM1.5 million, compared with RM500,000 under the goods and services tax (GST). The 6% service tax will only be imposed on restaurants with sales exceeding the threshold.

“I want to stress that the service charge is not a tax. It is a collection for restaurant waiters and waitresses. In the past, the GST was charged on the service charge, but under the SST, we do not tax the service charge,” he said.

No SST on prepaid mobile cards Guan Eng also assured prepaid card buyers that they will receive the full amount when they reload their prepaid mobile phones.

“We have issued the order that we want to ensure that an RM10 prepaid card will be worth RM10. The 6% service tax will be credited back as it is set in the service tax system.

“There should not be technical problems, but if it happens, we will give a rebate to the buyer for the same value. So do not be taken in by the parties who are instigating that a RM10 prepaid card is worth less than RM10. It is not true,” he said.

During a similar SST briefing yesterday in Kota Kinabalu, Sabah, he said the government will be meeting telecommunications companies to ensure that prepaid users get the full reload value for every top-up.