75% of shops, restaurants better off without GST, says Guan Eng

Finance Minister Lim Guan Eng says the government has also granted SST exemptions on building materials and services.

PUTRAJAYA: Seventy-five per cent of shops and restaurants that came under the goods and services tax (GST) are not subject to the sales and services tax (SST) after the SST threshold was raised to RM1.5 million as compared to RM500,000 under the GST, said Finance Minister Lim Guan Eng.

He said the SST threshold was three times higher than the GST previously charged to consumers from restaurants which had an annual turnover of over RM500,000.

Following this, he said there were only 4,372 restaurants registering their businesses under the SST regime as compared to 17,574 restaurants under the GST.

“Is not the SST impact much less than GST when only 25% of restaurants and coffee shops are affected by the SST compared to GST?” he said in a statement today.

Lim also blamed former prime minister and former finance minister Najib Razak for allegedly ignoring the fact that the 6% service tax imposed under SST was the same as the GST.

Najib in his Facebook post had expressed dissatisfaction after the “pau”, or steamed buns, which he bought in Tanjong Malim were charged SST. He uploaded a picture of the receipt which showed the SST amount of RM3.80.

Meanwhile, Lim said the SST also saw consumers enjoy lower car prices on at least five car brands, namely Perodua, Honda, Toyota, Volkswagen and BMW compared to their GST prices. The vehicles are cheaper by between RM2,000 and RM3,000.

He cited as examples the BMW 118i M Sports car price of RM185,800 compared to the RM188,800 with the GST, Honda Jazz 1.5V RM83,633 (RM85,750) Toyota Vios 1.5SA / T RM93,200 (RM93,980)and Volkswagen Polo at RM74,900 (RM76,888).

Lim also said the Finance Ministry would meet the Real Estate and Housing Developers Association (Rehda) Malaysia following the initiative by its Penang chapter (Penang Redha) to reduce house prices.

The move would see discounts of 10% for houses costing RM300,000 and above, and 6% for those costing RM300,000.

He said the government also granted SST exemptions on building materials and services which was different from GST.

“The federal government welcomes any decision from developers to lower house prices in tandem with the SST exemption. I will meet with Rehda Malaysia to discuss whether the same steps taken by Penang Redha can be applied throughout the country,” he said.