Malaysiakini News

MOF: No SST for construction services, building materials

Published:  |  Modified:

There will be no sales and services tax (SST) charged upon the costs of construction services and building materials once the tax is implemented, the Finance Ministry has announced.

In a statement, Minister Lim Guan Eng stated that the pressure on house prices, industrial and commercial buildings is expected to be eased by the abolition of the goods and services tax (GST) and with this exemption of the SST.

Lim stated that examples of building materials that will not be subjected to SST are cement, sand and iron.

This, he said, was in contrast to the higher construction costs "during the GST era".

"During the GST regime, basic materials such as bricks, cement, sand and other construction materials were subjected to GST at 6 percent. In addition, construction services were also subjected to 6 percent of GST," the statement read.

He said this had led to the increase in construction costs, including in house prices.

"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.

The GST was repealed at the Dewan Rakyat on Thursday after the House passed the GST (Repeal) Bill. 

This was followed by the passing of the Service Tax Bill 2018 despite objections from the opposition lawmakers. This was after the Sales Tax Bill 2018 was passed the day before.

The two bills formed the SST, to be implemented in September.

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