There will be no sales tax on RON95, RON97 and diesel fuels for now, but the situation may change if fuel prices fall, Royal Malaysian Customs Department director-general Subromaniam Tholasy announced today.

During a briefing on the sales and services tax (SST) scheme that is to be implemented on Sept 1, Subromaniam said oil refineries will nonetheless be required to register with the department.

“The reason is that crude oil prices are very high. At a time when crude oil prices are very low, then there is a possibility that a tax may kick in. We don’t know when, maybe in a few years’ time,” he said.

Other items that would be exempted include most capital goods, such as factory machinery, medicines, live animals and foods, including canned sardines that were previously taxed.

In addition, diapers, sanitary pads and tampons would be tax-exempt. Critics had previously dubbed the GST charged on sanitary pads and tampons as “pink tax” and said it was unfair to women.

Basic construction materials also tax-exempt

Basic construction materials such as bricks, cement and sand would also be tax-exempt, in line with the government’s pledge to do so in order to help bring down construction costs.

On the other hand, items that would be taxed include processed foods such as fruit juice and butter, engine oil, tobacco products and alcoholic beverages, fizzy drinks, shampoo, smartphones and spectacles.

Big ticket items such as passenger cars, motorcycles with engine capacity above 250 cubic centimetres, as well as aircraft and yachts would also be taxed.

There are also some construction materials that are taxable, namely tiles, ceramic wares, windows and frames for doors or windows.

In total, there would be 5,443 items exempted from sales tax, compared to 545 items exempted under GST.

As for taxable goods, Subromaniam said 5,612 categories of goods would be taxed at 10 percent, while 793 categories would be taxed at five percent.

Overall, Finance Minister Lim Guan Eng said the government expects to collect about RM4 billion from SST this year, and about RM21 billion next year. In contrast, the government would collect RM44 billion if GST is maintained next year.

A full list of taxable and exempted goods can be found on the Customs Department’s MySST website.

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