Malaysia enforces zero GST

Officers from the Domestic Trade, Cooperatives and Consumerism Ministry in Johor state checking on a business outlet yesterday. Malaysia's unpopular 6 per cent GST was zero rated by the new Mahathir Mohamad administration to fulfil an election promis
Officers from the Domestic Trade, Cooperatives and Consumerism Ministry in Johor state checking on a business outlet yesterday. Malaysia's unpopular 6 per cent GST was zero rated by the new Mahathir Mohamad administration to fulfil an election promise.PHOTO: BERNAMA

JOHOR BARU • Officers from Malaysia's Domestic Trade, Cooperatives and Consumerism Ministry were at a shop in Johor to ensure compliance with the effective scrapping of the goods and services tax (GST) from yesterday.

Malaysia's unpopular 6 per cent GST was zero rated by the new Mahathir Mohamad administration to fulfil an election promise.

The GST will be fully scrapped after the government repeals the Goods And Services Tax Act 2014 in Parliament soon.

In its place, the administration will reintroduce the sales and services tax (SST) from Sept 1, after getting a new Bill through Parliament.

The SST, which was first introduced in the 1970s, will be a 10 per cent tax on a more limited number of goods and services .

The GST, which was introduced in April 2015, last year brought in a revenue of RM42 billion (S$14.2 billion), but was widely blamed by the public for spiking the cost of everyday goods and services.

Tun Daim Zainuddin, the head of the Council of Eminent Persons that advises the new government on economic issues, had said on May 18 that the SST is expected to bring in a revenue of RM30 billion a year.

A version of this article appeared in the print edition of The Straits Times on June 02, 2018, with the headline 'Malaysia scraps unpopular GST'. Print Edition | Subscribe