Finance minister Lim Guan Eng has announced that the bill on the sales and services tax (SST) will be passed in parliament in August, paving the way for its reintroduction in September, as previously announced. Its return will mark the end of the “tax holiday” enjoyed since June 1 when the goods and services tax (GST) was zero-rated.
He reconfirmed that SST will have its rate set at 10% for sales and 6% for services, according to the New Straits Times. This is identical to the rate it was when it was replaced by GST in April 2015.
From an automotive viewpoint, car prices came down when GST took over from SST, but could possibly go up higher than GST-levels with the reintroduction of SST, according to the Malaysian Automotive Association (MAA).
“Before GST was implemented, SST was 10%. If we consider this figure, we expect the prices of vehicles to increase, post-SST. This is an easy estimate if the rate is the same,” MAA president Datuk Aishah Ahmad has said in May.
Vehicle sales during this tax-exempt period have been brisk, so much so that while there’s still more than a month to go before SST returns, car companies are starting to report that levels of deliverable stock are being exhausted or have run out, such is the spike in demand.
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AI-generated Summary ✨
The comments reflect a mix of opinions on the new SST system and its impact on prices, especially for cars. Many express concern that prices, particularly for vehicles and daily necessities, may increase or remain high despite the tax changes. Some critics believe SST is a complicated, less transparent system compared to GST, fearing more opportunities for tax evasion and increased costs for consumers. Others highlight that the promised price reductions haven't materialized, and that overall living costs may rise under the new regime. There is also skepticism about government spending and the effectiveness of the tax reform in benefiting ordinary Malaysians. Overall, the sentiment indicates distrust and worry about future price hikes and economic burden, with some viewing the change as a political move rather than a consumer-friendly adjustment.