Introduction
Starting September 1, 2018, Sales and Service Tax (SST) administered by the Royal Malaysian Customs Department (RMCD) will be enforced in Malaysia. Taxes SST is a one-tier tax where this tax is only applicable to certain manufacturers and producers and can not be claimed. This tax is considered as a cost to the business. Sales tax and service tax are two different taxes. First, the sales tax is known as a single stage tax where this tax is only charged once by a manufacturer cost or import cost of 5% – 10% rate depending on the item. Secondly, service tax imposed by 6% on certain services when offered to consumers.
Unknowingly, almost half of the 11,197 items listed under GST have been converted into a list of SST of 6,405 items imposed. Consumer products at 793 can be taxed at 5%, while 5,612 other items are 10% and services chargeable at 6% under SST 2.0. The government expects SST to be more tax-appropriate for the middle-income economy and better serve the people economically. The re-introduction of SST has also triggered doubt and misunderstanding among consumers that they feel the burden of paying 16% on purchased items. This is a misunderstanding because the SST mechanism does not work in that sense. In fact, SST will increase the purchasing power of Malaysians, since SST is a single-tier tax and imposes a lower burden on daily spending. In short, we can only expect to see some differences and adjustments in product prices depending on the type of service or well paid.
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Therefore, Sales Tax will be imposed on goods produced by individuals or companies with annual returns above RM 500,000 and goods imported into Malaysia. Here are some 5%-10% sales tax of camel meat and rabbits, seafood, dairy products, cooking oils, processed meats, dry foods, sugar, cocoa, liquor, cigarettes, cosmetics, perfumes as well as soap. Whereas, everyday items and health goods that are excluded by SST are chickens, ducks, fish, cattle, goats, chicken eggs, duck eggs, noodles, yellow noodles, kuey tiaw, pasta, soup leaves, salt, spices , cereals, oats, vegetables, fruits, vitamins, medicines, First-Aid items, sodium killer poisons. Malaysia Service Tax is a form of indirect tax imposed on any provision of taxable services against the continuation of any business by taxable persons in Malaysia. The following is a 6% service charge that includes food and beverage provision such as cafe, restaurant, catering, insurance, Takaful, hotel, nightclub, betting and gambling such as casinos and lotteries, provision of electrical goods, telecommunications services and TV channels paid, parking, security, motor vehicle service or repair, credit or charge card, IT sevices, as well as advertising.
