KUALA LUMPUR, Nov 2 — The reintroduction of the Sales Tax and Services Tax (SST) will benefit businesses due to lower compliance and administration costs, said the Ministry of Finance (MoF).
It said the new SST was also more business friendly, less bureaucratic and practical in facilitating business cash flow management.
“The government will continue to enhance the new SST system to increase its efficiency and effectiveness,” the MoF said in its Fiscal Outlook and Federal Government Revenues Estimates 2019 report 2019.
The SST was reinstated effective September 1, 2018 to replace the Goods and Services Tax (GST). The SST legislation was gazetted on August 26, 2018.
The SST comprises two independent taxes, governed by separate legislations, namely the Sales Tax Act 2018 (Act 806) and the Service Tax Act 2018 (Act 807).
In order to facilitate and reduce cost of doing business, all applications for registration and exemptions were made online after consultation with industry players who complained about red tape in the exemption mechanism and arduous paperwork during the previous SST system.
Under the new SST, the Royal Malaysian Customs Department carried out automatic registration of eligible manufacturers and service providers by migrating data from the GST database.
As at September 14, 2018, a total of 94,783 businesses had registered under the SST, comprising 56,918 service providers and 37,865 manufacturers.
One of the biggest concerns in the implementation of the SST is the re-emergence of informal economy.
While this is a valid cause of concern, the risk is mitigated through the existing business database and continuous information sharing between the Customs Department, Inland Revenue Board and Companies Commission of Malaysia. — Bernama
