By Syauqi Jamil
KUALA LUMPUR: The overall impact of the Sales and Services Tax (SST) should not be measured by adding together the 10% sales tax and 6% services tax, Deputy International Trade and Industry Minister Dr Ong Kian Ming.
The DAP Bangi lawmaker said it is wrong to combine both rates into 16% as the Sales tax is not imposed on factory manufactured product while the service tax is only imposed on services.
“Sales tax isn’t imposed on products manufactured by factories while service tax is only for services. So, we cannot combine it into 16%,” he told to reporters at the Parliament Lobby today.
Admitting that there are much confusion surrounding the issue, Ong said that a briefing on SST will be held among lawmakers to further clarify issues pertaining to the taxation system.
“There are a lot of items that are affected by the Goods and Services Tax (GST) but exempted from the SST. I think there is a minor confusion of the scopes between these two taxes at present.
“We will soon organise a briefing to advise all MPs on issues related to SST and how it is different from GST,” he said.
In reintroducing the SST, Ong said that only RM21 billion will be collected from SST, in compared to RM42 billion under GST.
He assured that there won’t be a higher cost of living when SST is implemented in September, claiming that the taxation system will eventually be returned to the people.
The SST is expected to be implemented on September 1 after the laws are passed in the current Parliamentary sitting.
Services will be taxed at 6% and the sale of goods will incur a 10% tax.