SST rate reduced by half on some goods, says Lim


The Sales and Services Tax (SST) for certain goods including cosmetic, beauty products and skincare, mobile-phone accessories, watches, retread tyre, tyre and tubes for motorcycles have been revised downwards to 5% from the initial rate of 10%.

Finance Minister Lim Guan Eng said the decision was made after reviewing feedbacks from various stakeholders.

He said in a statement on Wednesday that SST exemption has also been granted on products including prepaid card for mobile phone issued to Malaysians, groundnuts, imported completely knocked-down components by local franchise car assemblers, salted, processed or dried fish (ikan masin, ikan perkasam, ikan jeruk and ikan masam), as well as seafood under the crustacean and mollusc HS (harmonised system) code.

In addition, pewter; plastic bag for rice packing; cigarettes and tobacco products sold in restaurant; rental of business space in restaurant, as well as sales of ship, ferry and boat have also been exempted from SST.

The government has also considered the appeal of restaurant operators on the threshold, hence revising the threshold for restaurant and coffee shops for SST registration from RM500,000 to RM1.5 million.

Lim said additional flexibility has been given by excluding the sales of cigarettes, tissue papers and rental from the calculation of the threshold for the restaurants.

Previously, he said the list of items in the Guide on Sales Tax Rate for Various Goods for the implementation of SST will be reviewed and amended until year-end.

The list of goods is dynamic and organic and continuous review will be conducted to determine its impact on government revenue and the wellbeing of the people.

“For the time being, the list will only be used as a reference until amendments can be made accordingly.

“This is so, as we feel that there may be goods for which we think the tax can be reduced to 5% from 10%, or from 10% or 5%, that are to be exempted. This is something that we can consider,” Lim told a press conference on SST implementation in Putrajaya earlier this month.

Lim also said the government needs time to examine the implications of the review.

“But to me, it will not have a big impact. That is why we need more time to look at the implications, but it is important that we want the people to be able to enjoy the food that they love all this while and not be burdened by this tax,” he added.