Malaysia's GST zero-rated from June 1: Mahathir

Marco Green
May 16, 2018

The new government in Malaysia has moved rapidly to deliver on its promise to abolish the 6% goods and services tax (GST), announcing a zero rate beginning June 1, 2018.

In a statement, today, the ministry stated that the imposition of GST at zero rate is applicable throughout the country until further notice.

The MoF said the adjustment does not cover those goods and services that are already exempted from GST.

This decision does not include goods and services listed in the Goods and Services Tax (Exempt Supply) Order 2014, which remain exempted from GST.

"At the same time, registered traders are also 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.

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

Earlier, Prime Minister Tun Dr Mahathir Mohamad confirmed that he instructed the government to stop GST collection as well as impose a fixed petrol price. The current Pakatan Harapan administration had promised to replace GST with SST so this could be a first step to that direction.

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

Automotive companies are still in the dark regarding the effects of abolishing GST in favour of SST, whether prices will go up or down - and they haven't had a concrete answer for prospective customers.

The new government has said that its income would not be affected by doing away with the tax.

Other reports by Click Lancashire

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