"However, if we investigate and find that they are not exempted, then they will have to pay the taxes. This was the soft approach we meant,” Finance Minister Lim Guan Eng said. Pix by Rohanis Shukri

SUBANG JAYA: Finance Minister Lim Guan Eng said the government will use a 'soft-approach' with traders and businesses in implementing the Sales and Services Tax (SST).

He hoped that retailers and businesses would declare their taxes honestly.

However, he said those who are unsure should refer to the Custom Department on their eligibility.

"We will place our trust in them first. Let them apply to the (Customs Department) first. If they are exempted then it's fine.

"However, if we investigate and find that they are not exempted, then they will have to pay the taxes. This was the soft approach we meant," he told reporters after meeting traders and business, here today.

Lim said Malaysian government was formed based on a trust platform between the people and the administration.

"They should tell the truth and we will be able to overcome any issues," he added.

He was hopeful that the eligible companies would not evade from paying their taxes.

Meanwhile, Royal Malaysian Customs Department (RMCD) has revised its annual target for the Sales and Services Tax (SST) collection from RM21 billion to RM22 billion.

Dang Wangi district police chief Assistant Commissioner Shaharuddin Abdullah said the organiser, Pemantau Malaysia Baru (PMB), did not inform police about the rally, which lasted about 30 minutes. Pix by Muhd Zaaba Zakeria

RMCD director general Datuk Seri Subromaniam Tholasy said the additional collection of RM1 billion would be generated from several new sectors that are now part of the new tax regime.

Although he did not specify them, the new sectors include gambling activities, airline and charter flight services (domestic helicopter services), except those in Sabah and Sarawak, apart from Information Technology (IT) services and domestic electric supply involving a monthly usage of over 600 units.

Subromaniam said RMCD has successfully registered 77,451 companies via automatic transfer system from MyGST to MySST system.

He added these companies have been notified through email. Of the total, 32,577 companies were derived from sales tax and the remaining 44,874 companies were registered under the service tax.

"We believe that not all companies automatically registered are eligible to be registered under the MySST because the data might be inaccurate," he said.

He pointed out that the Custom Department will only migrate the eligible companies' data used to be under MyGST system to MySST system automatically.

"But we urge them to contact the Custom Department and iron out the matter," he said.

He said eligible companies who have yet register under the MySST should manually register before the implementation on September 1.

"We estimate about 10,000 eligible companies have yet to register under MySST system," he said.

Previously, RMCD expected between 70,000 and 80,000 local companies to register under the impending SST.

Subromaniam said the total companies registration under SST would be significantly lower compared to 472,000 companies registered under the Goods and Services Tax (GST) previously.

Subromaniam said it is vital for RMCD to have engagements session by educating companies on the SST tax mechanisms.

"We will help and guide companies in preparing their transitional to SST to ensure we can efficiently implement this tax system," he said.

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