RESEARCH and Development (R&D) services by Malaysian companies operating outside the free trade zone areas may be exempt from the Sales and Services Tax (SST), said Finance Minister Lim Guan Eng.

The exemption would be a way to support the industry as the nation pushes towards Industrial Revolution 4.0, said Lim.

“There are companies operating outside the free trade zones that conduct R&D on chips, nanotechnology, motherboard and other technology.

“We want to encourage these activities among Malaysian companies,” he said at a briefing on SST for representatives from various industries and businesses at a hotel in Penang this morning.

Lim had earlier said that the government had decided to exempt rental fees collected by food outlets that lease out space to stall operators.

“Food outlets will not have to include the rent they collect as revenue. We will only take revenue from food and beverage sales,” he said, adding that the exemption will soon be gazetted.

Only food outlets that earn RM1.5 million and above are liable to be charged SST.

Lim also said this meant the sale of other items at food outlets like cigarettes and tissue paper were also not included.

“That is the leeway given to such businesses, like coffee shops where you get your kopi o kaw so the tax burden can be reduced,” he said.

The briefing in Penang was the 13th to be held nationwide, and the third for the state.

Lim said he had personally addressed 11,000 people nationwide in such briefings.

“I think the explanations have been clear. If there are mistakes, we will correct them. We will also continue to improve the system,” he said.

Lim said in his speech earlier that the new government did not want to resort to punishing tax evaders, despite there being provisions under the law for penalising those who do not pay the SST.

“I have received some objections from inside (on leniency).

“Officers say we cannot do this because the people will take advantage… but I said let’s try it out in this new administration.

“We have to trust that everyone wants to pay tax and comply with the law. We have to forgive and trust each other.

“Don’t worry if you (tax payers) make mistakes. But don’t take advantage of the openness and friendliness of the authorities to get what you cannot get,” he said.

The SST came into effect nationwide on September 1, replacing the highly-unpopular Goods and Services Tax (GST). – September 9, 2018.