Manufacturers: Cost may rise if new SST broader than before

Soh said there should also be strong enforcement on traders to ensure the benefit of lower cost under SST can be passed down to consumers. — Picture by Ahmad Zamzahuri
Soh said there should also be strong enforcement on traders to ensure the benefit of lower cost under SST can be passed down to consumers. — Picture by Ahmad Zamzahuri

KUALA LUMPUR, July 19 — Manufacturers could face higher costs if the government widens the range of taxable categories under the revived Sales and Service Tax versus its previous iteration, an industry association said.

Federation of Malaysian Manufacturers (FMM) president Datuk Soh Thian Lai said this issue would be raised in the federation’s meeting today with the Royal Malaysian Customs.

“The scope and range of products to be covered under this newly-reintroduced SST could be enlarged compared to previous SST era, which was in place until the end of March 2015.

“And this could increase cost burden especially to the selling price of the manufacturers and importers,” he was quoted saying by local daily The Star.

The government has yet to announce the scope of the SST regime, which will involve sales tax at 10 per cent and service tax at six per cent.

Soh said the government should increase the previous threshold of RM100,000 annual turnover for businesses to register under SST, as this will relieve smaller firms from having to register under the SST regime to be introduced this September.

He said FMM wants automatic tax reliefs to be granted for “all inputs of raw materials used by licensed manufacturer as this will help to address double taxation”, while also seeking automatic tax relief for any taxable services rendered to manufacturers.

He said there should also be strong enforcement on traders to ensure the benefit of lower cost under SST can be passed down to consumers.

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