Govt will likely withdraw the SST exemption if any benefit is not passed down to consumers
By SHAHEERA AZNAM SHAH / Pic By TMR
Property developers have until the end of October to submit their reports on savings that are made as a result of the Sales and Services Tax (SST) exemption on construction materials, before the government makes any decision to either revoke or retain the benefit.
Finance Minister Lim Guan Eng said the government will likely withdraw the SST exemption on construction materials and services if any benefit is not passed down to consumers.
“We are giving them until the end of this month, hoping that they would be able to give us positive responses on the savings.
“I think it is only fair to see the savings being passed down to the consumers as the government is collecting less from the housing industry,” he said at the launch of Institute of Corporate Directors Malaysia in Kuala Lumpur yesterday.
Lim said it is impossible for the government to control land value in its bid to reduce housing prices, and the only way to achieve the aim is via a tax exemption on construction materials and services.
“Land prices would depend on the locality and market forces, and it is outside of the government’s control.
“It is too big for us to influence the market. So, what we can do is to provide some cost savings for construction players, hoping that it would bring down the prices,” he said.
He added that the ministry is hoping to evaluate the decision prior to the presentation of Budget 2019 on Nov 2.
Recently, Lim has asked property developers to reduce house prices at the national level after Penang developers agreed to reduce between 6% and 10%.
In August, Lim announced that building materials and construction services will not be subjected to SST to counteract the Goods and Services Tax, which imposed a 6% levy on basic building materials.
On another note, Lim said the proposal of corporal punishment for corruption offenders by the Malaysian Anti-Corruption Commission (MACC) would require legal input from the attorney general (AG).
“This is an issue that would be addressed by the AG as it has the possibility to reduce corruption in the country.
“I personally support the proposal by MACC, but it would be up to the AG to look at it,” he said.
On Sept 30, MACC chief commissioner Datuk Seri Mohd Shukri Abdull asked the government to consider the implementation of caning as a punishment for corruption offenders to reflect the anti-graft agency’s serious effort to eradicate corruption.