PETALING JAYA - Malaysian businesses are in for a rough ride, five days into the implementation of the Sales and Service Tax (SST), due to confusion over the taxation system.
The Pakatan Harapan (PH) government has repealed the unpopular goods and services tax (GST) and brought back the SST, saying this would ultimately result in lower prices for consumers.
The 6 per cent GST was widely blamed for hiking the prices of goods from supermarket items to food at roadside restaurants.
The SST comprises a sales tax of between 5 per cent and 10 per cent on goods, and a 6 per cent tax on services.
Unlike the GST, the SST is a single-stage tax collected only once, and applies to a narrower set of goods and services.
SST revenue is expected to contribute RM21 billion (S$7 billion) a year to government coffers, less than half the RM44 billion collected in GST revenue last year.
Malaysia was using the SST system for years before the GST was introduced in 2016, but the basket of items that will be taxed have been changed.