The Sales and Services Tax
Updated on Wednesday 22nd August 2018
The SST replaces or is rather re-introduced in place of the GST which entered into force in 2015. This sales tax affects a smaller range of goods and it is expected that the prices for some goods and services will drop, while for other items, broadly defined as lifestyle goods and services, the price is likely to increase slightly.
While the new SST regime is expected to be an improved one, in practice the taxation system is likely to be a hybrid one, that will retain some of the features that were present for the GST. For some companies in Malaysia, the costs that apply to GST compliance might have been significant, as were the effects of the delayed refund payments. However, the shift from the GST to the SST will present some challenges.
With its implementation being expected in September, as per the self-deadline imposed by the Government, companies in Malaysia should start preparing for the new tax changes. This can include rethinking accounting strategies in the company and reviewing the prices in an effort to make sure that the introduction of the SST will not have a negative impact on their costs.
Some business sectors are expected to benefit from this re-introduction. The effects will be seen in time and the services sector is the one that is expected to see some positive changes. This would be possible is the re-introduced SST resembles the pre-2015 one which was only applicable to selected services.
Our team of lawyers in Malaysia can give you complete details about the tax law changes and how your company, irrespective of type or size, can prepare for these.
Malaysia will introduce its new sales and services tax (SST) starting in September. This will replace the old goods and services tax (GST) and will have a broader scope and the effects of this tax will be seen in both an increase of the prices for some goods and services and the decrease of prices for others.
The re-introduction of the SST
The SST replaces or is rather re-introduced in place of the GST which entered into force in 2015. This sales tax affects a smaller range of goods and it is expected that the prices for some goods and services will drop, while for other items, broadly defined as lifestyle goods and services, the price is likely to increase slightly.
While the new SST regime is expected to be an improved one, in practice the taxation system is likely to be a hybrid one, that will retain some of the features that were present for the GST. For some companies in Malaysia, the costs that apply to GST compliance might have been significant, as were the effects of the delayed refund payments. However, the shift from the GST to the SST will present some challenges.
Preparing for the SST
With its implementation being expected in September, as per the self-deadline imposed by the Government, companies in Malaysia should start preparing for the new tax changes. This can include rethinking accounting strategies in the company and reviewing the prices in an effort to make sure that the introduction of the SST will not have a negative impact on their costs.
Some business sectors are expected to benefit from this re-introduction. The effects will be seen in time and the services sector is the one that is expected to see some positive changes. This would be possible is the re-introduced SST resembles the pre-2015 one which was only applicable to selected services.
Our team of lawyers in Malaysia can give you complete details about the tax law changes and how your company, irrespective of type or size, can prepare for these.