KUALA LUMPUR, Aug 12 ― All construction materials and services will be exempt from the sales and services tax (SST), Lim Guan Eng declared today.
The finance minister hopes the move across the construction sector will bring down the prices of residential, commercial and industrial buildings.
“The Federal Government hopes that the construction costs can be reduced with the exemption of SST. Some of the building materials that will not be subjected to SST are cement, sand and iron.
“With the proposed exemption of goods from SST and the difference in GST implementation, I hope both the developers and the buyers can benefit from the reduction of this tax burden,” he said in a statement.
Lim noted that the 6 per cent goods and services tax (GST) imposed on basic building materials such as bricks, cement and sand by the previous federal government had inflated the cost of construction and the final selling prices of houses and other buildings.
He declared the GST “dead” last Wednesday after Parliament passed a Bill to repeal the consumption tax. The government had “zero-rated” the GST in June before its passage in the Dewan Rakyat.
The SST, which is separated into a sales tax of 10 per cent and a 6 per cent service tax, is expected to kick in from September 1.
Tax consultants had warned as early as June that property prices may not come down after the GST was abolished if the SST were still imposed on construction materials and services, and may even be higher.