The government will provide sales and service tax (SST) exemptions involving the rental of small stalls and sale of cigarettes to food and beverages shop operators.

Finance Minister Lim Guan Eng said after receiving various feedbacks from food and beverages shop traders, the SST tax exemption should be given to rental of small stalls within the shop’s compound.

"Food and beverage shop operators are only subject to SST tax after exceeding the threshold value of RM1.5 million, which includes only food and beverages and rental rates are not inclusive of food and beverages. So rent is not required to be included in SST,” he told reporters in George Town today.

Earlier, the Bagan MP attended an SST briefing which was attended by 300 traders and representatives of industries companies.

Also present were Deputy Youth and Sports Minister Steven Sim, Customs director-general T Subromaniam and State Welfare, Caring Community and Environment Committee chairperson Phee Boon Poh.

Lim also announced that the sale of cigarettes at such shops that did not exceed the threshold value of RM500,000 annually would also be given SST exemption.

He said the government had agreed that the threshold value of both items be set aside to RM1.5 million annually for food and beverages.

“The SST exemption on the sales of cigarettes in food and beverages shops with a threshold value of less than RM500,000 will help traders in easing their burden with the goods being sold at the same price in other shops,” he said.

Lim also said the government was considering giving tax exemption to local operators of the research and development sector based outside the Free Industrial Zone (FIZ) which provided services to companies there.

"This is to encourage the local R&D sector in facing the Industrial Revolution 4.0 era and enhance competitiveness among local industry players,” he said.

- Bernama