PUTRAJAYA is adopting a “soft approach” in the enforcement of the sales and services tax (SST) next month to give the business community time to adjust, said Finance Minister Lim Guan Eng today.

He said the idea was for Malaysian businesses to register with the Customs Department, irrespective of whether they are exempted from the tax or not.

“Let them apply first (for SST), if they say they are exempted, later we will investigate,” he said.

“And after we investigate and find they are not exempted, then they will have to pay SST. If they are exempted, then they are exempted. That is what we mean by soft approach,” he said, after attending a SST briefing with traders in Subang.

Lim said the traders had bought up several problems and uncertainties in the briefing.

“And of course a few questions were asked, such as services management… they are not really sure if they are exempted from SST.

He said other details were also ironed out, such as the tax-exempt status accorded to milk, but not chocolate milk.

“I think milk flavour is also important; as such, I will exempt chocolate milk from SST,” he said.

He said he trusted Malaysian businesses to fall in and register for the SST as the new government believed in trust.

“Because the Malaysian government is built on the trust of the people… (the trust) goes both ways.”

He said he hoped business owners would not attempt to evade the tax and that “hopefully, we will solve the issues raised.”

As for the RM19.3 billion in unpaid GST refunds, Lim said Customs would implement the SST scheme before making the payouts.

He said to refund money, “there must be money first.”

“So let us have the money first (from SST collection), then we will refund the GST.” – August 18, 2018.