Published: Wed, May 16, 2018
Markets | By Otis Pena

GST In Malaysia To Be Zero-Rated Starting From 1 June 2018

GST In Malaysia To Be Zero-Rated Starting From 1 June 2018

The Finance Ministry has determined that the supply of goods and services whether local or imported, presently charged at the standard rate of 6% under the Goods and Services Tax (GST) will be reduced to zero rate from June 1 onwards.

GST would be zero-rated from June 1, the Ministry of Finance said in a statement on Wednesday. This excludes goods and services that are now GST exempted.

"All registered traders must follow the decision of the zero rate now".

For more information, interested parties can contact the Royal Malaysian Customs Department at 1-300 88 8500 or 03-7806 7200.

So what does this mean to the rest of us?

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Unlike what was previously announced, this effective elimination of GST will not coincide with the introduction of a sales and service tax (SST), as outlined by Pakatan Harapan in its manifesto - instead, there will simply be no tax on goods and services until a new tax structure is announced later on.

The announcement comes a day after former central bank governor Zeti Akhtar Aziz told Malaysians not to expect the GST removal to happen overnight, saying that it may require parliament approval. With this new zero-rated GST, this could mean slightly lower bill cost and price reduction for smartphone, tablets and pretty much all goods and services that are now imposed with the 6% GST.

Prior to being voted into power in the 14th general election, PH had promised that it would abolish the GST within 100 days of forming government.

Some analysts fear that the decision would worsen Malaysia's fiscal position, including blowing up the budget deficit, now at 3.1% of GDP.

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