GST effectively scrapped with 0% rate from June

GST effectively scrapped with 0% rate from June

In press release by the Finance Ministry today, the ministry said the measure to impose GST at zero rate will take effect starting June 1, 2018 and applies to the while country until further notice.

The stipulation, however, does not cover goods and services listed under the 2014 Goods and Services Tax (Exempt Supplies) Order that has remained exempted from GST.

"As such, all registered business entities have to comply with the GST rate adjustment to 0%".

"At the same time, registered traders are still subject to all current regulations prescribed in respect of tax invoices, tax returns within the prescribed period of time and tax credit input claims".

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

Malaysia Resets Goods and Services Tax to Zero From June 1, 2018
GST Confirmed 0% From June 1—Here Are Important Questions That M'sians Should Be Asking

Prior to being voted into power in the 14th general election, PH had promised that it would abolish the GST within 100 days of forming government.

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

But Zeti Akhtar Aziz, a former central bank governor who is serving at a temporary advisory panel for the Mahathir government, said Malaysia can meet its revenue requirements by prioritizing its projects, increasing the efficiency of the public sector, avoiding wastage and exploring new sources of revenue.

The 6% GST came into effect on April 1, 2015.

Unlike what was previously announced, this effective elimination of GST will not coincide with the introduction of a sales and service tax (SST), as outlined by Pakatan Harapan in its manifesto - instead, there will simply be no tax on goods and services until a new tax structure is announced later on.

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