The government will forge ahead with the implementation of the Sales and Service Tax (SST) scheme on Sept 1 despite a rushed schedule and other concerns. 

Finance Minister Lim Guan Eng said if SST is not implemented by September, the government will be facing an operating deficit.

“As much as we want to delay it, we have no choice because if we don’t do it by Sept 1, we will be facing an operating deficit because we will be short of RM4 billion.

“When a country faces an operating deficit, it is going to be terrible,” he told a media briefing on SST at the Finance Ministry headquarters today.

In its election manifesto, Pakatan Harapan had promised to replace GST with SST within its first 100 days in power.

Lim explained that an operating deficit means that a government would not be able to pay its operating expenses such as salary, and maintenance cost, and the government could not afford to let this happen.

As such, the government will continue engaging with businesses regarding the SST and may provide more tax exemptions based on feedback received, he said.

Meanwhile, Royal Customs Department director-general Subromaniam Tholasy said there will still be transitional issues in the shift from GST to SST, which will primarily affect businesses rather than consumers.

One issue, however, is that car buyers who have paid for their purchase in full before Sept 1 but receive their vehicle after SST is implemented will still be liable for SST.

This is because the Sales Tax Act 2018 is defined in such a way that it is applicable to goods and services delivered after Sept 1.

SST website crash

Meanwhile, Lim apologised for the crashing of the SST website yesterday. The site only recovered at 10pm last night.

"Many who registered online (complained) of the system crashing and other technical problems. I apologise for any weakness," Lim said.

Subromaniam said the attitude of Malaysians who registered at the last minute was among the reasons for the crash of the system.

"I have to explain, for there is a reason for that (website crash). We were doing migrating from manual registration to online," Subromaniam said.

He said this migration involved major work, including the registration and application for tax exemptions, which his department had less than two-and-a-half months to do.

The officers had to bring down the system at times in order to upload content onto the website, he explained, reiterating that the system is now functioning well.

He added that the department’s proposed list of SST exemptions has now been finalised and gazetted, and members of the public can see the list on the department’s MySST website.

The government expects to collect about RM4 billion under the SST scheme this year, and RM21 billion next year.

This is compared to the RM44 billion the government would have collected in a year under GST.

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