Finance Minister Lim Guan Eng has announced the sales and service tax (SST) threshold for eateries has been increased from RM1 million to RM1.5 million.

At a media briefing on the SST in Putrajaya today, he said the decision is final.

The restaurants and eateries with a turnover of above RM1.5 million annually will be taxed under SST beginning Sept 1.

Under the previous goods and services tax (GST) system, the threshold was RM500,000.

"The restaurant operators wanted us to increase the threshold, we increased to RM1 million, but they are not satisfied.

"They want us to increase more and there was one request asking it to be set at RM3 million. It is difficult," he said.

"I agreed with their request to increase, (but) this is the last time we increase. No more," he said.

 

Meanwhile, Customs director-general T Subromaniam, who was also at the media briefing, said that charges imposed by private hospitals will be exempted from SST.

These charges were taxed under SST 1.0 and GST.

"Previously, we only taxed the B2B insurance (insurance sold to businesses), and it will be expanded to B2C insurance (sold to individuals and families).

"A lot of people asked us why you want to expand the coverage? The government needs a little bit income, lah," Subromaniam said, adding that life insurance and health insurance will be exempted.

Service tax will be imposed on the hotels with a turnover of above RM500,000, he said.

Previous services taxed under GST, including telecommunications and paid-TV services, will continue to be taxed under SST, he said.

He said that the sales tax thresholds for all businesses have been increased to RM500,000, as compared to only RM100,000 under SST 1.0.

Under service tax, he said, law firms, surveyors, entertainment outlets, golf clubs, health wellness centres and massage parlours will be taxed once their annual turnover exceeds RM500,000.

Subromaniam said that  car buyers who booked a car during the tax holiday will be taxed under the SST if their cars are delivered after Sept 1.

From Aug 16 to now, 79,966 businesses have registered with the Customs Department through the auto-transfer system from MyGST to MySST.

From that figure, 32,577 have registered for sales tax 2018 and 44,874 have registered under services tax 2018.

RELATED REPORTS

Guan Eng: SST implementation rushed to avoid operating deficit

Finance minister hopes inflation rate will drop to 2pct after SST begins

Sales tax exempt on petrol and diesel, for now