THE sales and service tax (SST) tabled today in Parliament does not state the rates set by the government in the legislation.

Instead, according to the Sales Bill 2018 and Service Bill 2018, the rates will be determined by the finance minister.

The minister is required to table the rate before Parliament for a period of 120 days for it to be passed.

If the rates are not agreed upon, the sales tax charged will be refundable to the people.

Taxable items are defined as goods manufactured in Malaysia or goods imported into Malaysia, while service taxes are taxable by a registered person conducting his or her business in Malaysia.

The bill says that the minister has the power to exempt any goods or class of goods from being taxed.

The minister also has the power to exempt any person or class of persons from payment of either whole or any part of the tax.

The director-general of customs will also be given the power to enforce and punish any wrongdoings related to the SST.

Penalties relating to the SST can be paid by installments and if an offender defaults in payments, a surcharge of 10% can be imposed on the outstanding balance.

The director-general is also empowered to seize any goods belonging to the person for the recovery of the sales tax or penalty.

The Pakatan Harapan government announced that the highly-unpopular goods and services tax (GST) would be zero-rated from June 1.

On July 16, Finance Minister Lim Guan Eng said the SST would be implemented in its place and set at 10% for sales and 6% for services.

Lim said the SST, together with rising crude oil prices and extra dividends from government-linked companies, will bring in an additional RM14.4 billion to make up for the loss of RM21 billion from the zero-rating of the GST.

Replacing the GST with the SST was among the promises made by PH in its election manifesto. – July 31, 2018.