KUALA LUMPUR: Deputy International Trade and Industry Minister Ong Kian Ming stressed that Sales and Services Tax (SST), which will come into effect on September 1, is not 16 per cent.
The former special officer to the Finance Minister said the charges of 10 per cent and 6 per cent, respectively, should not be added up as they are applicable to separate items and are on different levels.
“Sales tax will be applied at the point of manufacturing while the service tax is only applicable to service providers.”
“It would be wrong to combine the rates and assume that it would be 16 per cent collectively,” he told reporters at the Dewan Rakyat lobby on Tuesday.
He also said there appeared to be some confusion among Members of Parliament, who will be briefed by the Finance Ministry later.
“There are also a lot of items that are affected by the Goods and Services Tax (GST) but are exempted from SST.
“I think there is a little confusion of the scopes of these two taxes at the moment.”
“To help everyone understand more, we will have a briefing soon to advise all MPs on matters related to SST and how it differs from the GST,” he said.
Ong, who is Bangi MP, said a simple look at the total tax collection under each system is evidence enough of the benefits of swapping back to SST.
“The GST generated a revenue of about RM42 billion a year for the government.
“But under the SST, only RM21 billion will be collected. I think this will be beneficial because it will be returned to the people,” he said.