Translate
27 August 2018
Winners and losers of sales and services tax (SST)
Who are winners and losers of sales and services tax
Monday, 27 Aug 2018
by intan farhana zainul
Healthy regime: The healthcare industry is one of the biggest beneficiaries under the SST system because consultation fees, medications, usage of medical equipment and ambulance services are exempted.
PETALING JAYA: The sales and services tax (SST) regime is likely to have an impact on the earnings of manufacturers and importers while healthcare and building material companies are among the major beneficiaries.
Under the SST system, which will begin from Sept 1, several manufacturers and importers would have to pay up to 10% tax rate in comparison with the 6% rate under the previous goods and services tax (GST) regime.
Based on the list of goods to be taxed under the SST, manufacturers involved in the flavoured drinks, alcohol and tobacco, as well as automotive sectors are likely to face higher taxes.
As for the producers in the rubber gloves, wood-based and electronic goods sectors, the tax is said to be limited to some segments of their production.
A tax consultant said a number of manufacturers and importers would have to pay higher tax of 10% compared with 6% under the GST.
“But it is worth noting that there are also companies that would be paying less if they are subject to 5% rate or exempt from it,” said the chief executive officer of Tax Advisory and Management Services Yong Poh Chye.
The SST is a single-layer tax, which only applies to the manufacturing and importers level, and does not involve a lot of transactions, according to Yong.
This is in comparison with the GST which is a multi-layer system that applies across the value chain.
“Under the SST, we expect the prices of goods to go down despite the higher tax rate for certain items compared with the GST,” Yong said.
“For example, a box of flavoured drinks worth RM100 is being taxed at 10% and the manufacturer would garner RM10, while under GST, the same goods could garner RM12 because of the multi-layer tax system pass-through via the manufacturer, wholesalers, and retailers,” he explained.
Additionally, he said under the SST, 38% of items under the consumer price index bucket of goods and services are subject to tax while under the GST there is almost 60%.
“There are many items that would be exempted under the SST including cans of sardines, dairy products, coffee and tea.
“Bicycles, small motorcycles and building materials such as cement and bricks are also not subject to the 10% tax,” he said.
In the automobile sector, the completely knock-down models are exempted from the sales tax while the completely-built-up models are subject to the 10% sales tax.
The healthcare industry would be one of the biggest beneficiaries under the SST system because consultation fees, medications, usage of medical equipment and ambulance services are exempted.
On the additional 6% service tax, Yong said the tax rate would only apply to food and beverages (F&B) outlets that churned more RM1mil turnover a year.
“The 6% service tax is only applicable to certain prescribed services compared with 6% GST that applied to most services.
“In the case of restaurant business, the 6% SST is only imposed if the turnover is more than RM1mil a year compared with RM500,000 under the GST,” he said.
Yong expected the excise duty and import duty to remain at the same rate.
It is worth noting that tobacco and alcohol are heavily taxed in Malaysia. The last excise duty hike for the tobacco sector was in November 2015, at 36%.
Excise duty for locally-produced hard liquor increased from RM24 to RM60 per litre in December 2016. Excise duty for beers had been changed to RM175 per 100% volume per litre, from the previous RM7.40 per litre and 15% ad valorem tax, effective since March 1, 2016.
Yong hoped that when the country’s finances improve, the import duty and excise duty would be reduced.
Read more at https://www.thestar.com.my/business/b
Who are winners and losers of sales and services tax
TAXATION
Monday, 27 Aug 2018
by intan farhana zainul
image: https://www.thestar.com.my/~/media/online/2018/08/26/18/58/bizd_pg1_aug27_ky_1.ashx/?w=620&h=413&crop=1&hash=B1B7963527DE1A772167D7E230C1B0EDEDE64AE5
Healthy regime: The healthcare industry is one of the biggest beneficiaries under the SST system because consultation fees, medications, usage of medical equipment and ambulance services are exempted.
PETALING JAYA: The sales and services tax (SST) regime is likely to have an impact on the earnings of manufacturers and importers while healthcare and building material companies are among the major beneficiaries.
Under the SST system, which will begin from Sept 1, several manufacturers and importers would have to pay up to 10% tax rate in comparison with the 6% rate under the previous goods and services tax (GST) regime.
Based on the list of goods to be taxed under the SST, manufacturers involved in the flavoured drinks, alcohol and tobacco, as well as automotive sectors are likely to face higher taxes.
As for the producers in the rubber gloves, wood-based and electronic goods sectors, the tax is said to be limited to some segments of their production.
image: https://content.thestar.com.my/smg/settag/name=lotame/tags=Int_Automotive_BahasaAudience,Int_Sports,Int_Lifestyle_Environment,Int_Travel_Business,Int_Food_Groceries,Int_Automotive,Demo_BahasaAudience,Int_Entertainment,Int_Travel_Budget,Int_Business_Finance_PersonalFinancing,Int_Lifestyle,Int_Business_Finance,Int_Travel,Int_Lifestyle_Books_Literature,Int_Tech_Telco_Cellular_WirelessDevices,all,Int_Business_Finance_SME,Demo_Gender_Male_enr,Int_Sports_Football,Demo_Gender_Female_enr,Int_Sports_SportsEvents,Int_Sports_Badminton,Int_Automotive_Affluent,Demo_Age_65plus_enr,Int_Parenting_BahasaAudience,Int_Education,Int_Property,Int_Entertainment_LocalCelebrities,Int_Lifestyle_Health_Fitness,Int_Food,Int_Food_BahasaAudience,Int_Entertainment_KPop,Int_Education_TertiaryEducation,Demo_Age_25to34_enr,Int_Travel_Local,Int_Entertainment_BahasaAudience,Int_Travel_BahasaAudience,Demo_AffluentAudience,Int_Parenting,Int_Tech_Telco
The heavyweights in the consumer sector are British American Tobacco (M) Bhd
image: https://cdn.thestar.com.my/Themes/img/chart.png, Heineken Malaysia Bhd
image: https://cdn.thestar.com.my/Themes/img/chart.png, Carlsberg Brewery Malaysia Bhd
image: https://cdn.thestar.com.my/Themes/img/chart.png and Fraser & Neave Holding Bhd.
The bigger listed automotive players are UMW Corp Bhd, Tan Chong Motor Holdings Bhd
image: https://cdn.thestar.com.my/Themes/img/chart.png and DRB-Hicom
image: https://cdn.thestar.com.my/Themes/img/chart.png Bhd
image: https://cdn.thestar.com.my/Themes/img/chart.png.
A tax consultant said a number of manufacturers and importers would have to pay higher tax of 10% compared with 6% under the GST.
“But it is worth noting that there are also companies that would be paying less if they are subject to 5% rate or exempt from it,” said the chief executive officer of Tax Advisory and Management Services Yong Poh Chye.
The SST is a single-layer tax, which only applies to the manufacturing and importers level, and does not involve a lot of transactions, according to Yong.
This is in comparison with the GST which is a multi-layer system that applies across the value chain.
“Under the SST, we expect the prices of goods to go down despite the higher tax rate for certain items compared with the GST,” Yong said.
“For example, a box of flavoured drinks worth RM100 is being taxed at 10% and the manufacturer would garner RM10, while under GST, the same goods could garner RM12 because of the multi-layer tax system pass-through via the manufacturer, wholesalers, and retailers,” he explained.
Additionally, he said under the SST, 38% of items under the consumer price index bucket of goods and services are subject to tax while under the GST there is almost 60%.
“There are many items that would be exempted under the SST including cans of sardines, dairy products, coffee and tea.
“Bicycles, small motorcycles and building materials such as cement and bricks are also not subject to the 10% tax,” he said.
In the automobile sector, the completely knock-down models are exempted from the sales tax while the completely-built-up models are subject to the 10% sales tax.
The healthcare industry would be one of the biggest beneficiaries under the SST system because consultation fees, medications, usage of medical equipment and ambulance services are exempted.
On the additional 6% service tax, Yong said the tax rate would only apply to food and beverages (F&B) outlets that churned more RM1mil turnover a year.
“The 6% service tax is only applicable to certain prescribed services compared with 6% GST that applied to most services.
“In the case of restaurant business, the 6% SST is only imposed if the turnover is more than RM1mil a year compared with RM500,000 under the GST,” he said.
Yong expected the excise duty and import duty to remain at the same rate.
It is worth noting that tobacco and alcohol are heavily taxed in Malaysia. The last excise duty hike for the tobacco sector was in November 2015, at 36%.
Excise duty for locally-produced hard liquor increased from RM24 to RM60 per litre in December 2016. Excise duty for beers had been changed to RM175 per 100% volume per litre, from the previous RM7.40 per litre and 15% ad valorem tax, effective since March 1, 2016.
Yong hoped that when the country’s finances improve, the import duty and excise duty would be reduced.
Read more at https://www.thestar.com.my/business/business-news/2018/08/27/winners-and-losers-of-sst/#fGrbo8SjqTArhiFC.99usiness-news/2018/08/27/winners-and-losers-of-sst/#fGrbo8SjqTArhiFC.99
Popular Posts - Last 7 days
-
Ringgit advances as domestic optimism offsets US rate concerns Bernama 18/11/2024 Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzani...
-
Sugar overload: A growing threat to kidney function Bernama 16/11/2024 Approximately 3.8 mln Malaysians suffer from chronic kidney disease, ...
-
Bursa Malaysia dibuka tinggi, jejaki kenaikan di Wall Street dalam tempoh semalaman Bernama 22/11/2024 Keseluruhan pasaran adalah positif, d...
-
Warga emas maut ketika tukar tayar kereta di LKSA Astro Awani 18/11/2024 Tindakan seorang lelaki warga emas menghentikan keretanya di bahu ...
-
Bung Moktar, isteri diperintah bela diri tiga tuduhan rasuah Bernama 18/11/2024 Bung Mokhtar dan Zizie tiba di Istana Kehakiman, Putrajaya, ...
-
Malaysia to become leading hub for green investments, drive sustainable growth Astro Awani 20/11/2024 Minister of Housing and Local Governme...
-
Malaysia dipilih semula terajui Lembaga Pengarah SMIIC Bernama 20/11/2024 MITI berkata keanggotaan Malaysia dalam SMIIC telah diluluskan ol...
-
More than 800 million adults have diabetes globally, many untreated, study suggests Reuters 17/11/2024 A person receives a free blood sugar...
Popular Posts - Last 30 days
-
McDonald's E. coli crisis reveals why vegetable contamination is 'harder problem' than beef Reuters 26/10/2024 Fresh produce is ...
-
CNN CBS AP BBC US PRESIDENTIAL ELECTIONS LIVE RESULTS: https://edition.cnn.com/election/2024/results/president?elec...
-
Ringgit advances as domestic optimism offsets US rate concerns Bernama 18/11/2024 Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzani...
-
Kadar jangka pendek diunjurkan kekal kukuh disokong operasi BNM Bernama 04/11/2024 Hari ini, BNM akan menawarkan dua tender repo berbalik m...
-
Sugar overload: A growing threat to kidney function Bernama 16/11/2024 Approximately 3.8 mln Malaysians suffer from chronic kidney disease, ...
-
Lyia Meta, the first Malaysian singer nominated in the Grammy Awards Astro Awani 11/11/2024 Lyia Meta continues to strengthen her position...
-
TikTok gives assurance to cooperate with MCMC, BNM to address cyberbullying, scams Bernama 14/11/2024 PM Datuk Seri Anwar Ibrahim meeting w...
-
The King of Spain was mocked, pelted with mud and eggs by flood victims Agency 04/11/2024 07:15 MYT King Felipe VI (with an umbrella) is pr...
Blog Archive
-
▼
2018
(4100)
-
▼
Aug 2018
(420)
- Teenage sailor Fauzi Kaman Shah won the Laser 4.7 ...
- AG Appoints A Senior Lawyer and An Ex Judge as le...
- Sidang Media Penuh SPRM Tentang Tangkapan 9 orang ...
- Malaysia National Day Parade 2018 I Perbarisan da...
- Video : Malaysia Stuns India in Semi Finals To Qua...
- The National Day 2018 celebrated on Friday (Aug 31...
- Jacky Cheung fans camp out at the Quill City Mall ...
- Tun Dr. Mahathir:our aspiration for Malaysia to be...
- Azizulhasni Awang Wins Cycling Sprint Gold at Asia...
- The Yang di-Pertuan Agong cancelled the Sept 9 off...
- Putrajaya clarifies after cronyism allegation, Pet...
- A “Middle Eastern source” may have provided US$12 ...
- Putrajaya has said it is disappointed with Batu Ca...
- An unemployed man was today charged for proclaimin...
- Tabung Harapan Malaysia will cease accepting donat...
- Timbalan perdana menteri berkata beliau 'sangat ti...
- Two men were arrested in connection with the fake ...
- After 13 years, the National Day celebration will ...
- The Sales and Service Tax (SST) threshold for eate...
- The Esscom is not happy with Malaysian actor who c...
- DNA samples of the Dutch model Ivana Smit and that...
- GT Global Race (M) Sdn Bhd has issued a winding-up...
- JPJ BLacklist for those who fail to Settle DBKL su...
- Dato Seri Vidas Cryptocurrency LaVida Coin goes o...
- The mother of the late Tan Sri Jamaluddin Jarjis a...
- A Malaysian silat exponent caused an uproar after ...
- Batu Caves Temple Paint job on staircase in viral ...
- Former Malaysian External Investigation Organisati...
- MACC has arrested former DG of Research Department...
- Tottenham Hotspur romped to a 3-0 Premier League w...
- Anwar Ibrahim Bersuara Isu Beliau Dan Tun Dr Mahat...
- Ali Hamsa -KSN Replaced By Treasury secretary-gene...
- Malaysia won the coveted inter-regu sepak takraw ...
- Former MIC vice-president Tan Sri S. Balakrishnan ...
- 7 civil servants from Research Department at Prime...
- Thai Facebook users have condemned a Thai man for ...
- Husband claims police are refreshing remand order ...
- KL parents accidentally leave behind 3 year old to...
- Rafizi Ramli is allowed to contest in the PKR elec...
- Najib Razak was summoned to the Anti-Money Launder...
- Malaysian 21 Year Old Rafiq Beats South Korean Def...
- Winners and losers of sales and services tax (SST)
- "I was offered RM1.5 million if I admitted to kill...
- Former MIC VP Tan Sri Arrested by MACC for Money ...
- Full list of SST tax-exempt items are expected to ...
- The ceiling price for coarse granulated sugar and ...
- Malaysia will not allow foreigners to buy resident...
- Perhilitan ranger Ahmad Tarmizi found after almost...
- Gunman kills four at Madden 19 video game tourname...
- Just hours after a double murder shocked Penang, a...
- Anwar - The Security Offenses (Special Measures) A...
- E-Sports Fans Rejoiced After Malaysian Team placed...
- DPM Wan Azizah Speaks From The Heart At the launch...
- AG: No one bothered about the Manifesto before GE1...
- Nicol Davids wins Malaysia's second Gold Medal in ...
- AKSI Mat Rempit Lawan Arus Elak Roadblock
- Finance Minister Lim Guan Eng Says it as it is: GS...
- Cash handouts such as the 1Malaysia People’s Aid (...
- Tun Mahathir Hentam Najib, Rosmah, Jho Low
- Mat Sabu's warning to politicians who run afoul of...
- A woman walking in just her bikini bottom and a lo...
- Tun Dr Mahathir to those from previous administra...
- Tun Dr Mahathir needs the Council of Eminent Perso...
- Saifuddin Abdullah plays the role of A Diplomat wh...
- Escorts must be moonlighting, if Hishammuddin’s es...
- Referee gives Japan highly debatable Penalty in th...
- Malaysia is assured of a gold medal in the women's...
- Group of 20 Transgenders cite Hindu religious righ...
- Police Inspector Muhd Aidil Ja’afar became an Inte...
- 10 out of 13 judges from the apex court, are due t...
- Dr Muhammed Abdul Khalid appointed the Economic Ad...
- Yang di-Pertuan Agong will not be conferring any t...
- The ceiling of the Bukit Raja toll plaza in Klang ...
- 23-year-old babysitter arrested to facilitate inve...
- 3 Southeast Asians, including a Malaysian Mohamad ...
- THE Sessions Court has issued warrants of arrest f...
- Several main roads in Putrajaya will be closed and...
- Three masked men stormed into a couple's home in K...
- 2018 Royal Floria Putrajaya evolved from tourism p...
- Penampilan Via Vallen di Sukan Asia 2018 Berhasil ...
- Najib Razak's Loyalist In 1MDB Scandal Tan Sri Lod...
- Admiralty Court grants the selling of superyacht E...
- Gambar & Video Bogel Anak Pelakon Terkenal Che Ta ...
- Jho Low and his father Tan Sri (Larry) Low Hock Pe...
- Official Theme Song Asian Games 2018 Performed by:...
- Police have identified the mastermind involved in ...
- Singapore Airlines (SIA) pilot has died after a mo...
- Man was nabbed by Indonesian police for sexual as...
- THE Inland Revenue Board is being investigated for...
- Cosmetics millionaire Datuk Seri Vida, has launche...
- RM1,111,111 for 'Malaysia 1' number plate
- Tun Dr Mahathir " People Who Signed Contracts With...
- PM Tun Dr Mahathir questiones the need for a wall ...
- Police smashed a drug smuggling and distribution s...
- On Wednesday Yang di-Pertuan Agong Sultan Muhammad...
- A superbiker died after being dragged two kilometr...
- Heavy security, secrecy surrounds Musa Aman's VVIP...
- Malaysian student’s delightful rendezvous with Dr ...
- Bila Menteri Pertahanan Pi Cucok Duit Kat Maybank
- Nga kor Ming Menbongkarkan MAPS mengalami kerugian...
-
▼
Aug 2018
(420)