By P PREM KUMAR & DASHVEENJIT KAUR / Pic By ISMAIL CHE RUS
The government has tabled proposed laws in the Dewan Rakyat that will pave the way for the implementation of the Sales and Services Tax (SST) beginning September 2018.
The Sales Tax Bill 2018 and Services Tax Bill 2018 were tabled in the august house yesterday, for the first reading by Deputy Finance Minister Datuk Amiruddin Hamzah (picture). The second reading of the bills is expected to take place next week.
Amiruddin earlier tabled the Goods and Services Tax (GST) (Repeal) Bill 2018, a notice to cancel the law which enforced the GST since 2015.
The repeal bill seeks to provide for the continuance of liability, whereby any liability incurred may be enforced or any GST due, overpaid or erroneously paid may be collected, refunded or remitted under the repealed law as if it had not been repealed.
In an explanatory statement to the two new bills, the government seeks to provide for the charging, levying and collecting of SST, and for matters connected with it.
The Sales Tax Bill seeks to provide for the tax to be charged and levied on any taxable goods manufactured in Malaysia and sold, used or disposed of by a registered manufacturer, or taxable goods imported into Malaysia by any person.
In Section 3(1) of the Sales Tax Bill, the word “manufacture” is defined as “in relation to goods other than petroleum, the conversion by manual or mechanical means of organic or inorganic materials into a new product by changing the size, shape, composition, nature or quality of such materials and includes the assembly of parts into a piece of machinery or other products, but does not include the installation of machinery or equipment for the purpose of construction; and in relation to petroleum, any process of separation, purification, refining, conversion and blending”.
In terms of rate, the bill proposed that it should be determined by the finance minister, who is also empowered to vary or amend the rate.
Meanwhile, the Services Tax Bill seeks to provide for the tax to be charged and levied on any taxable services provided in Malaysia by a registered person in the course of carrying on a business.
The bill also seeks to empower the minister to prescribe any service to be a taxable service, as well as determine and amend the tax rate.
Both the bills propose for sales and services tax evaders to be fined up to 20 times the amount of tax or/and an imprisonment of up to five years, for first-time offenders.
For repeated offence, the fine could go up to 40 times of the tax amount owed or/and an imprisonment of not exceeding seven years.
Meanwhile, the government also tabled two other bills to amend the Free Zones Act 1990 and Customs Act 1967, which are consequential to the implementation of the SST Bills and repealing of the GST Act.
The amendments to Free Zones Act are mainly to remove duplications of provisions, which have already been provided for under the SST Bills.
Among the amendments on the Customs Act, notable ones include increasing the penalty on the offence relating to a customs agent acting without approval, from the present fine of not exceeding RM500 to imprisonment for a term not exceeding five years, or to a fine not exceeding RM100,000, or both.