Latest news with #SST
New Straits Times
3 hours ago
- Business
- New Straits Times
Register early for SST to avoid extra costs, tax expert tells businesses
KUALA LUMPUR: Businesses that fall under the scope of the expanded Sales and Service Tax (SST) should register early to avoid extra costs during the transition period. Customs Department announced that businesses could voluntarily register for SST from today and be registered from July 1. The mandatory registration deadline is Aug 31. The expanded SST kicks in on Sept 1. Henesh Kannaa, executive director of TRATAX Sdn Bhd, a tax consulting firm based in Kuala Lumpur, said it would be financially beneficial for businesses to register before the Aug 31 deadline. "Due to technical reasons, some businesses are better off registering sooner than later," he said in a LinkedIn post. Citing the example of a manufacturer that exports all its finished goods, Henesh said previously, if the finished goods were exempt, this manufacturer could remain unregistered under SST but still benefit from the B4 exemption, a provision that allows for import or purchase of taxable materials without paying sales tax. However, with the inclusion of more goods under the taxable category beginning September, these businesses would now be required to register for SST, he said. Under the new rules, registered manufacturers might qualify for the C1 exemption, which similarly allows for tax-free acquisition of raw materials, he said. "But here's the catch for any imports or purchases made in July and August, it appears that the manufacturer may be ineligible for both B4 and C1 exemptions if it has not registered early. "This could lead to higher input costs during these two months solely due to the technicalities of the SST law," Henesh said. To avoid extra costs, he advised manufacturers to register for SST by June 30 so that they could get the C1 exemption from July 1. He said service providers could benefit from early registration, especially those involved in business-to-business (B2B) transactions. "Some service businesses may want to register early to avoid breaking the chain of B2B exemptions. "A careful assessment is needed to weigh the pros and cons of registering by June 30 versus waiting until the Aug 31 deadline. "The right choice really depends on each business's circumstances." Henesh said early registration is only available to businesses that are not currently SST-registered. For those already registered, the expanded scope will automatically take effect on July 1, with no option to delay compliance to September, he said.
Daily Express
6 hours ago
- Business
- Daily Express
Govt's revision of SST expansion proves it listens to rakyat, says Fahmi
Published on: Saturday, June 28, 2025 Published on: Sat, Jun 28, 2025 By: Raphael Lee, FMT Text Size: The government announced yesterday that imported apples and oranges will be exempted from the expanded sales and service tax. (Envato Elements pic) Kuala Lumpur: The government's decision to exempt certain imported fruits from the expansion of the sales and service tax (SST) is proof that it listens to the people, says unity government spokesman Fahmi Fadzil. 'Usually, the finance ministry does not change its position after it makes an announcement,' he said at an event in Pantai Dalam here today. Yesterday, Prime Minister Anwar Ibrahim said the government has decided to exempt imported apples and oranges from the expanded SST. He said the government acknowledged that many from among the poor and B40 income group would buy these imported fruits as they were affordable. The finance ministry previously said that the expansion of the SST from July 1, including a 5% rate on imported fruits, was strategically aimed at bolstering local agricultural demand and strengthening food security. Fahmi also hailed the Energy Commission's decision to lower electricity tariffs, saying this shows the government is genuine in implementing reforms that will benefit the public. On June 20, the commission said some 23.6 million domestic users in Peninsular Malaysia will enjoy fairer electricity rates, through the new tariff schedule approved by the government. Under the new tariff scheme from July 1 to the end of 2027, the base average tariff will be adjusted to 45.4 sen/kWh from the 45.62 sen/kWh which was approved in December 2024. The current base tariff of 39.95 sen/kWh was set from 2022 to 2024. * Follow us on our official WhatsApp channel and Telegram for breaking news alerts and key updates! * Do you have access to the Daily Express e-paper and online exclusive news? Check out subscription plans available. Stay up-to-date by following Daily Express's Telegram channel. Daily Express Malaysia
Borneo Post
7 hours ago
- Business
- Borneo Post
SST revision exempts 75 pct of SMEs, says Samenta
Datuk William Ng KUCHING (June 28): The revision to the expanded Sales and Services Tax (SST) will exempt approximately 75 per cent of small and medium enterprises (SMEs) from the additional eight per cent tax on rental and financial services, according to the Small and Medium Enterprises Association Malaysia (Samenta). Samenta national president Datuk William Ng described the move as a 'welcome and meaningful relief.' 'We are grateful to the Prime Minister for hearing our concerns and for directing the Ministry of Finance to revise the threshold upwards,' he said in a statement issued today. The statement was made in response to the Ministry of Finance's announcement on the revised SST implementation, which includes a higher annual sales threshold for service tax on rental and financial services. Ng noted that Samenta was among the first to raise concerns over the potential impact of the SST expansion on SMEs when it was initially announced. He said the association had urged the government to raise the threshold to protect smaller businesses, while still supporting a broader and fairer tax base. 'While we will continue to advocate for a balanced and SME-friendly approach in future tax reforms, we consider this matter concluded and will not seek further concessions on the SST expansion,' he added. In the meantime, Ng urged affected SMEs to take immediate steps to implement the expanded SST and to contact the Royal Malaysian Customs Department for assistance if needed.
Free Malaysia Today
9 hours ago
- Business
- Free Malaysia Today
Expediting reforms will make tax hikes easier to swallow, govt told
World Bank's lead economist for Malaysia, Apurva Sanghi, said reducing spending would not be easy as most of it involved 'rigid' costs such as wages, pensions and debt service. PETALING JAYA : The World Bank's lead economist for Malaysia, Apurva Sanghi, says expediting reforms – such as enacting a government procurement law – will make the public less hostile towards tax hikes. In a post on X on the expansion of the sales and service tax, Apurva pointed out that the auditor-general regularly uncovered losses in public funds, irregular payments and wastages across various ministries. While some reforms have been carried out, a specific law to oversee government procurement has been delayed, he said. Apurva said reforms would build public trust, which in turn would make it 'easier to swallow bitter tax hikes'. 'Tax hikes are painful but people can bear them, if they're meaningful. 'This means faster progress, especially on governance reforms and that would increase trust.' Apurva said trust was the ultimate currency for any government. On comparisons made between the SST and the goods and services tax, Apurva said that while both were regressive, it could be made progressive via targeted cash transfers and exemptions. 'The current SST expansion does include progressive elements.' On June 9, the finance ministry announced that a 5% to 10% rate would be imposed on non-essential goods from July 1, although basic necessities would not be taxed. The announcement has triggered brickbats. Apurva also responded to those questioning the government's decision to raise taxes instead of reducing spending. He said while it was a fair question, the country needed to spend more, which meant it needed to raise more revenue. The finance ministry previously said that the SST collection is expected to increase by RM5 billion in 2025 and by RM10 billion in 2026, following the expansion of its scope. Apurva noted that both revenue and spending had dropped by 30% since 2012, which was well below those of global peers. 'Spending needs are only growing, especially as Malaysia ages,' he said, adding that reducing spending would not be easy as most of it involved 'rigid' costs such as wages, pensions and debt service which accounted for 57% of operation expenditure.
Free Malaysia Today
9 hours ago
- Business
- Free Malaysia Today
Plug leakages to ensure SST income not squandered, govt told
The government expects to generate an additional RM5 billion from the upcoming SST this year, and RM10 billion from 2026 onwards. (Bernama pic) PETALING JAYA : The government needs to plug inefficiencies in its departments and agencies to ensure the additional RM10 billion in yearly revenue expected from an expansion of the sales and service tax (SST) regime is spent wisely, an economist said. Ahmed Razman Abdul Latiff of Putra Business School said the government is currently prioritising procurement reform by introducing an open tender system to replace direct negotiations. Ahmed Razman Abdul Latiff. He said the open tender system offers a more structured approach which is essential to prevent wastage in public spending. 'Reforms to the procurement system are vital if we want to discourage graft and ensure that the additional RM10 billion in revenue earned from the expanded SST is not dissipated. 'Statistics show that a majority of cases involving wastage, leakages and corruption stem from a weak procurement system,' he told FMT. In a recent interview with FMT, Treasury secretary-general Johan Mahmood Merican said the government was in the midst of reforming the procurement system to ensure revenue is spent optimally and to curb leakages. Johan said the government was expected to generate an additional RM5 billion this year from the SST expansion which kicks in next month. The SST is expected to generate RM10 billion annually beginning next year. Earlier this month, the finance ministry announced that a 5% to 10% rate will be imposed on non-essential goods from July 1, including rent, lease, construction, financial services, private healthcare and education. However, basic necessities will retain its tax exempt status. With the expansion, the government expects the SST to generate RM51.7 billion in revenue this year. Afzanizam Rashid. Separately, Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the procurement reforms, being implemented alongside the SST, would help narrow the country's fiscal deficit. He said the dual initiatives would broaden fiscal space, enabling the government to enhance social assistance and allocate more funds for infrastructure development. Afzanizam said the increase in service tax to 8% in March last year bumped up SST collection by 30.3% in the first quarter of this year. Meanwhile, the implementation of targeted diesel subsidies has reduced spending on subsidies and social aid by 19.4%. 'The increased tax collection and reduced spending saw the fiscal deficit drop to 4.5% of the gross domestic product for the first quarter of 2024. 'This has allowed the government to increase aid for its Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA) programmes to RM13 billion this year, up from RM10 billion in 2024.'
