Govt's fine-tuning of SST in line with targeted approach, says Amir
KUALA LUMPUR : The decision to fine-tune the expanded scope of the sales and service tax (SST), which now sees certain food items and services exempted, is in line with the targeted approach adopted by the government, says Amir Hamzah Azizan.
The finance minister II said when the ministry decided to revise the list of items and services it took into account what was going to be financially impacted.
'But it goes back to the philosophy of targeted approach as opposed to blanket mechanism,' he told reporters here.
In June last year, the government introduced targeted diesel subsidies in Peninsular Malaysia, while the targeted subsidy for RON95 petrol is expected to be implemented in the second half of this year.
Last month, the finance ministry said a 5% to 10% rate would be imposed on non-essential goods from July 1, while the service tax was expanded to include rent, lease, construction, financial services, private healthcare and education.
However, last week the government decided to exempt imported apples and oranges from the expanded SST after acknowledging that many from among the poor and B40 income group would buy these imported fruits as they were affordable.
It also decided not to include beauty services such as manicures, pedicures, facials and hairdressing in view of public sentiments.
The finance ministry also raised the threshold for service tax registration for leasing or rental and financial services to RM1 million from RM500,000 to reduce the number of small businesses that would be affected.
Amir went on to say that the government would get feedback after rolling out policies and adjust accordingly as the administration was 'fair'.
'I hope people are happy we adjusted the SST.'
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