Ministry: Zero GST starts June 1

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KUALA LUMPUR — The Goods and Services Tax (GST) will be zero-rated for all items and services from June 1, the Finance Ministry announced yesterday..

“This move to impose the GST at zero rate takes effect from June 1, and applies to the whole country until further notice,” it said in a brief statement.

The ministry said the GST on all locally produced and imported goods alike will be zero-rated, adding that this will not affect goods and services that were already previously exempted from the GST.

The ministry said all registered traders must comply with the order.

“At the same time, registered traders are still subject to all current regulations, including those relating to the issuing of tax invoices, delivery of tax returns within the prescribed taxable period and input tax credit claims,” it said.

It also reminded traders that they must ensure the prices of their goods and services comply with the Price Control and Anti-Profiteering Act 2011 at all times.

The ministry’s announcement comes almost a week after the Pakatan Harapan (PH) coalition took over as the federal government.

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

Zero rating would essentially remove the price impact of the GST, but retain its tax reporting functions.

The consumption tax was introduced on April 1, 2015 by former prime minister Datuk Seri Najib Razak’s administration.

Prime Minister Tun Dr Mahathir Mohamad had on May 10 said the federal government will remove the GST and temporarily switch back to the previous Sales and Services Tax (SST) — a regime which PH had said is “fairer”.

Former Bank Negara governor Tan Sri Zeti Akhtar Aziz, who sits on the Team of Eminent Persons advising the PH government on the economy and finance, had said the country would still have sufficient revenue even after the GST is abolished. Zeti said this could be done by re-prioritising projects, improving efficiency, cutting wastage in the public sector and by seeking new revenue sources.