The government says that the sales and services tax (SST), which will be reintroduced on September 1, will not be imposed on all products and services, The Edge reports. According to finance minister Lim Guan Eng, the service tax will not be an all-inclusive one. “The 6% service tax applies to selected services and not all services, unlike the goods and services tax (GST),” he said.

He also said that there will also be two different rates of 5% and 10% for sales tax, which is applicable to selected manufactured and imported products, adding that details will be announced when the new SST Bill is tabled in parliament next month.

Lim said this in response to an earlier statement by former PM Datuk Seri Najib Tun Razak that GST was less of a burden to people than SST. He said in his response that simply adding up the sales tax and services tax rates is like “equating apples with oranges.”

“The sales tax is imposed on manufacturers’ and importers’ price, while the GST is imposed on the final consumer price. Hence it is wrong to claim that 10% sales tax is higher than 6% GST. How could the SST burden the people more than the GST, when the expected collection from the SST is estimated at only RM21 billion for a full year, while the GST had expected to collect RM44 billion in 2018, according to the previous government’s projection,” he added.

Lim said that the Ministry of Finance (MoF) has conducted a comprehensive SST review exercise with the assistance of accounting firm PricewaterhouseCoopers to rationalise the tax collection and reporting requirements. This, he said, will ensure that the SST will be far more efficient and less bureaucratic than GST or even the previous SST system, which was in place up to the end of March 2015.