KINIGUIDE | The federal government has been releasing more details about the Sales and Services Tax (SST) as the deadline for its reinstatement on Sept 1 draws near.
Abolishing the GST and replacing it with the SST has been a key election plank of the Pakatan Harapan coalition and one that it promised to deliver in its first 100 days in power.
As an interim measure, starting on June 1, it has zero-rated all goods and services that were previously standard-rated at six percent under the GST scheme.
Now, with Parliament in session, plans are afoot to table legislation to scrap the GST altogether and reintroduce the SST. These new laws are expected to come into force on Sept 1.
But what is the SST and how is it different from the GST? That is the question this instalment of KiniGuide will tackle.
What is the GST?
The GST was introduced in Malaysia through the Goods and Services Tax Act 2014, which came into force on April 1 the following year.
The standard rate for GST is six percent and it is collected at every stage of a supply chain.
However, some goods are zero-rated whereas others are GST-exempt. In addition, businesses can claim a tax credit (i.e., a refund) for GST collected from them by their suppliers.
The government had raised RM44 billion through GST last year and had originally targeted RM43.8 billion for this year.
And what is the SST?
The SST was introduced through the Sales Tax Act 1972 and the Service Tax Act 1975. They were in force until replaced by GST on April 1, 2015.