All about GST & SST
Find out more about the transition.
What is GST and SST?
Goods and Services Tax (GST)
This is a tax on most products and services for domestic consumption at every level in the production process. GST can be claimed as input tax for companies with revenue above RM500k. GST was implemented in April 2015 replacing SST. GST is the most commonly used form of taxation used by 160 / 190 countries globally. GST is also known as Value Added Tax (VAT) in some other countries.
Sales and Service Tax (SST)
SST was originally covered by 2 separate tax laws on a wide variety of goods and services at a single level implemented in 1970s. The Sales Tax Act 1972 is a single-stage tax charged typically at the manufacturer’s level. The Service Tax Act 1975 is a single-stage tax charged at the consumer’s level except at tax free zones. The sales tax was at 10% and service tax was at 6% respectively prior to being replaced by GST in 2015.
Summary of Changes
|Tax Revenue Estimate||RM45b||RM20b|
|Transparency & Regulation||High||Low|
|Tax Rate (%)||0%*||6-10%|
|Tax Stages||Multi-Stage||Single Stage|
|Business Input Tax Credit||Yes||No|
|Business Export Tax Relief||Yes||Partial|
|Business Implementation Cost||High||Low|
*Announced to reduce tax rate from 6% to 0% from Ministry of Finance dated 15th May 2018.