Four more items may be subjected to SST

KUCHING: Four new additional items might be subjected to the Sales and Services Tax (SST) 2.0, which will take effect from September 1.

The four items are domestic flights (except Rural Air Services), gaming, IT services and electricity.

According to the Royal Malaysian Customs Department (Customs) Sarawak SST Division Senior Assistant Director 1, Noelle Lily Morse, the proposed four items fall under the Services Tax 2018, which will be six percent for services. “This has been proposed to the government and it is now being debated in the Parliament sitting,” she said during the SST Handholding Programme at Borneo Convention Centre Kuching (BCCK) here yesterday.

On domestic flights, she explained that Rural Air Services would be exempted from the Services Tax; for instance, a flight from Miri to Bario would not be charged. “Meanwhile, casinos, games of chance, sweepstakes, gaming machines, lotteries and betting are subjected to the Services Tax,” she said.

Noelle added that in Sarawak, the Sales Tax on lotteries was already 10 percent and with the additional Services Tax of six percent, it would be 16 percent tax in total. On electricity, she said domestic consumers who used more than 600kWh would be charged the Services Tax,” she said. Noelle added that the Services Tax would not be chargeable on imported services.

The other proposed scope of (taxable) services for 2018 included hotels, insurance and Takaful, food and beverages, club, credit or charge cards, telecommunication, forwarding agents, legal, accounting, surveying, architectural, valuer, engineering, consultancy, employment agency, security, management services, parking, motor vehicle services or repair, couriers, hire and drive cars and advertising.

Meanwhile, touching on the Sales Tax of 10 percent, Noelle said the proposed new taxable goods would include computers, watches, cameras, golf-sets, water skis, mobile phones, yachts, private aircrafts, and other tourist items as well as petroleum refineries relating to petroleum products – RON97. “In relation to petroleum, manufacturing means any process of separation, purification, conversion, refining and blending,” she stressed.

According to her, the other proposed taxable goods are Processed Food (biscuits, fruit juices, processed meat/fish, butter, margarine, jams and cod liver oil), Food and Drinks (carbonated drinks, chocolate and ice creams), Furniture (sofas and mattresses), Electrical Appliances (television sets, radios, electrical devices, computers and accessories), Personal Care (shampoo, toothpastes, cosmetics, shower gels), Personal Items (watches, cameras, spectacles and handbags), and other goods (engine oil for vehicles), brake fluids, sanitary products (toilet bowls and sinks), construction materials (tiles, stones, and steels).“Meanwhile, some of the proposed goods to be exempted from the Sales Tax are Live Animals (horses, sheep, goats, fish), Food Items (rice, beef, mutton, chicken, fish, seafood, bread, cereal products, vegetables (cabbage and tomatoes), cooking oil), General Goods (newspapers, books, wheelchairs), Vehicles (bicycles, motorcycles below 250cc, fork lift and cranes), Medicines and Capital Goods,” she said. Noelle said the government would only collect the Sales Tax at the manufacturers’ level only.

“However, on the Goods and Services Tax (GST), the 6 percent tax being charged is mentioned is the sales invoice which is more transparent, but for SST, there will be incidents where the Sales Tax is embedded in the prices paid by consumers,” she pointed out. She said Labuan, Langkawi, and Pulau Tioman would not be subjected to SST as these areas were under the designated areas which were not subjected to SST.

Those with prescribed taxable services exceeding RM500,000 in 12 months must register for SST. Registered GST persons will have automatic SST registration.

Those who are not registered automatically can apply online at MySST. The proposed list of goods to be exempted from SST can be accessed at www.customs.gov.my.

Present at the SST Hand-holding Programme at the Borneo Convention Centre Kuching (BCCK) here was Royal Malaysian Customs Department (Customs) Deputy Director-General (Customs/SST), Datuk Paddy Abdul Halim. Around 1,000 participants from industrial companies, the federal and state government departments, Commerce Chambers, and Customs officers attended the programme to learn more about the process and implementation of the new SST.