On Wednesday (May 16), Malaysia’s finance ministry said that they would do away with the Goods and Services Tax (GST)- which is currently at 6 per cent, from June 1 this year.
The zero-rated GST effective from June 1 does not include the goods and services listed in the Goods and Services Tax (Exempt Supply) Order 2014, and hence, will remain exempted from GST.
This implementation stemmed from a promise the Pakatan Harapan coalition made while campaigning for the May 9 general election, from which they emerged victorious, and must now fulfill.
“All registered traders must follow the decision of the zero rate now. At the same time, registered businesses are still subjected to all current regulations,” said the ministry in a statement on May 16.
In return, the state said on Thursday (May 17) that it will reintroduce a sales and service tax (SST) to partly offset the shortfall in revenue that will come with the effective scrapping of GST.
The finance ministry said in a statement on Thursday, that the shortfall in revenue will be supported by specific revenue and expenditure measures that will be announced soon, including the reintroduction of the sales and services tax (SST).
However, it did not state when the sales tax will be introduced.