Friday 29 Mar 2024
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This article first appeared in The Edge Financial Daily on September 13, 2018

KUALA LUMPUR: Seventy-five percent of shops and restaurants that were taxed under the now-repealed goods and services tax (GST) are no longer taxed under the new sales and service tax (SST) regime, following an increase in the annual taxable turnover threshold to RM1.5 million, from RM500,000.

In a statement yesterday, Finance Minister Lim Guan Eng said under the GST system, there were 17,574 restaurants that had registered their businesses.

However, after the government raised the SST annual turnover threshold to RM1.5 million, from RM500,000 under the GST, a total of 4,372 restaurants registered their businesses.

Therefore, Lim said the implication from the SST is far lower than the GST as only 25% of the restaurants and cafes are subject to the new consumption tax system.

Lim also lambasted his predecessor and former prime minister Datuk Seri Najib Razak for acting innocent about the fact that under the GST system, there was a 6% tax rate on food and beverages as well.

“Datuk Seri Najib should not act innocent on this because he was the finance minister since 2008, even before the implementation of GST on April 1, 2015 when 6% SST was imposed as services tax for cafe and restaurants. The different is that under the SST, only restaurants with income surpassing RM1.5 million a year can impose the 6% service tax on consumers,” he said.

Lim added that the SST also resulted in consumers enjoying lower car prices, where at least five brands namely Perodua, Honda, Toyota, Volkswagen and BMW, have seen their prices reduced by RM2,000 to RM3,000 compared to the GST period. “The government is always  committed to ensuring prices of goods are under control during the implementation of the SST, which has now been refined.

“The Ministry of Finance, in collaboration with the Royal Malaysian Custom Department and the Ministry of Domestic Trade and Consumer Affairs, have been undertaking anti-profiteering campaign because there are businesses that take advantage to simply increase their prices and the government urge cooperation from the public to share information relating to unreasonable price increase,” he said.

Lim noted that the Real Estate & Housing Developers’ Association Malaysia, Penang Branch (Rehda Penang) had welcomed the government’s move to exempt the SST on construction material, and was studying the possibility of reducing housing price by up to 10% for those priced above RM300,000, while having a 6% discount on affordable houses priced below RM300,000.

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