THE sales and services tax (SST) is applied to different items and cannot be combined at 16%, Deputy International Trade and Industry Minister Ong Kian Ming said.

He said it was wrong to add the sales tax of 10% and services tax of 6% together as the former will be applied at manufacturing point while the latter is only for services when the government reintroduces SST in September.

“So, we cannot combine it into 16%,” The Star quoted the Bangi MP telling reporters in Parliament today.

Ong, who was a special officer under the Finance Ministry recently before his appointment as deputy minister, said a briefing would be held soon for all MPs on the replacement of the goods and services tax (GST) with the SST, as even some lawmakers were confused about the difference and impact.

Ong added that the SST would result in a lower cost of living.

““There are a lot of items that are affected by the goods and services tax (GST) but exempted from the SST,” he said.

GST was a multi-stage and broad consumption tax, whereas SST would only be applied once and to certain items and services only.

Finance Minister Lim Guan Eng yesterday announced the rates for the sales and service tax. The Pakatan Hrapan government also intends to abolish the GST law and introduce a SST law in the parliamentary sitting that began today.

Ong today said GST, introduced by the previous government in 2015, had generated about RM42 billion a year in revenue.

SST was only expected to generate RM21 billion but he said this would still be beneficial “because it will be returned to the people”. – July 17, 2018.