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Guan Eng tells Najib to quit 'feigned ignorance' on SST

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Finance Minister Lim Guan Eng has called on former prime minister Najib Abdul Razak to stop "pretending" to be unaware of some food items in restaurants being subject to the six percent sales and service tax (SST).

"Former finance minister Najib pretends he does not know that the six percent service tax is charged under the SST, just as it was under the goods and services tax (GST).

"He complains that he had to pay six percent tax for drinks and food at restaurants and coffee shops, even though he isn't a manufacturer.

"Najib should cease pretending he does not know this, as he was finance minister since 2008, before GST was implemented on April 1, 2015, when six percent SST was charged as service tax for coffee shops and restaurants," he said in a statement today.

Lim was responding to a Twitter posting by the former premier, who lamented being charged SST for a pau he bought recently.

Lim rebuked Najib on Monday, questioning why the former prime minister failed to heed the grumblings of the people when his government imposed the GST.

In his statement, Lim also pointed out that the new tax regime, around 75 percent of shops and restaurants that previously fell under GST would not be charged SST, once the income threshold has been increased from RM500,000 to RM1.5 million.

"The difference is that under SST, only restaurants with an annual income exceeding RM1.5 million will charge six percent service tax to customers.

"This is three times the income threshold compared to GST, as customers were taxed by restaurants earning more than RM500,000 annually.

"This is proven by just 4,372 restaurants registering their businesses under SST compared to 17,574 under GST," he said.

It was reported yesterday that the makes of five cars – Perodua, Honda, Toyota, BMW and Volkswagen – recorded lower prices upon the implementation of the SST when compared to the GST.

Citing SST exemption for construction materials, Lim also highlighted the announcement by Penang Real Estate and Housing Developers Association (Rehda) on a six and 10 percent discount on house prices.

Lim said Penang Rehda was prepared to lower prices of houses costing above RM300,000 by 10 percent, while the cost of affordable RM300,000 houses would be reduced by six percent.

The minister said he would be meeting Rehda Malaysia to discuss if its Penang's chapter's measure could be implemented nationwide.

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