Is The Sales and Service Tax SST Malaysia Here To Stay?
According to economists, the Sales and Service Tax (SST) Malaysia is here to stay because going back to Goods and Services Tax GST Malaysia just after it has been abolished will be harmful to businesses.
While the SST Malaysia resulted in a lower burden on the Malaysian residents due to its smaller tax base, it also meant that the government had to operate with a smaller revenue collected under SST Malaysia.
Economists feel that the government must demonstrate its fiscal discipline before the public will be willing to pay more taxes.
How Can SST Malaysia Be Expanded to Reach the Income Collected Under GST Malaysia?
One way is for a proposed 10 percent sales tax to be imposed on manufacturing, 4 percent sales tax on trading and 6 percent SST Malaysia on all services with essential goods exempted. Ensuring thorough compliance and a full collection of SST Malaysia will also help the government meet its spending needs.
Are There Ways That SST Malaysia Can Be Improved to Help Businesses?
Yes! If the government can put in place a system to exempt and exclude SST collection between businesses, this will really help businesses by avoiding the lengthy process of refunds.
Economists also hope for single legislation for SST Malaysia rather than the Sales Tax and the Service Tax. This will allow for full and complete integration between businesses.
Other economic experts are hoping that more tax revenue will come in when the Digital Service Tax starts in January 2020.