Malaysia has to review sales and service tax from September 1
On September 1, 2011, Malaysia will replace the three-year old products and services tax (GST) and resume the Sales and Services Tax (SST).
Earlier this year, the new government, led by Prime Minister Mahathir bin Mahmud, reduced six percent GST, effectively removing it for nationwide consumers.
Suggested SST and Discount
Under the new tax system, the service will be taxed by six percent and the product will be sold between 5 and 10 percent.
According to the proposed structure of SST, the goods made or imported in Malaysia will be charged on the sales tax in the taxable products. Export products from the country will not be subject to sale. In addition, in order to maintain single-level policy under SST, manufacturers will be eligible for the discounted sales tax paid for their raw materials and other materials for production.
Items not to be taxed include living organisms, milk, cream, rice, some vegetables, oil and bread, essential products such as newspapers and sanitary pads and bicycles for motor vehicles, driving vehicles and motorcycles below 250cc.
For services, taxes will be levied on specific scheduled services provided by the taxable person in Malaysian business. Service tax will not be charged on export or imported services. List of specific services include hotel and homeostat operators, restaurants, telecommunications, professional and consulting services, gaming, credit cards, domestic flights, information technology services and electricity.
Private hospitals and domestic flights excluding rural air services will not be taxed under the SSA.
Registration
For business with an annual turnover of more than RM500,000, the registration for the proposed SST should be done online through the MySST system, within the 12-month period starting September 1st.
Those who have already registered under the GST system will be automatically registered under the MySST system. Businesses can apply for voluntary registration if they make taxable products and do not meet the annual turnover threshold.
There is no group registration under the new SST regime.
Sales tax revenues are paid
Under SST, registered businesses will have to submit tax returns on a double basis. No refund will be made from the last day of the month after the taxable period. The penalty for delayed return is given below
- 10 percent of the first 30-day period.
- 15 percent of the second 30-day period.
- 15 percent of the third 30-day period
After 90 days, maximum penalty is 40 percent.
For the taxable period from September to October, 2018, the date for payment of the first income of November 30, 018 is 308. Businesses can submit income automatically, post it at the SST Processing Center or electronically through online MySST portal.
