The Ministry of Finance revealed that the number of goods exempted or zero-rated under the Sales and Services Tax (SST) is higher than the Goods and Services Tax (GST) which was abolished in 2018.
According to the ministry, there are 1,826 goods that are exempt from tax under SST, compared to only 607 goods when GST was first implemented.
This exemption includes basic necessities such as food, medicines, reading materials, as well as animal feed, fertilizers, pesticides and machinery related to agriculture and livestock.
The Ministry of Finance explained that SST also only covers 70% of all services in the economy, which is lower than GST which taxes 76% of services.
In a written reply in the Dewan Rakyat on Tuesday, the ministry stressed that the government remains cautious in expanding the scope of SST and that the move will be implemented in stages by taking into account its impact on the people's cost of living.
According to him, the greater number of exempted goods and the lower service tax coverage reflect the government's determination to safeguard the well-being of the people, as well as ensuring that the country's fiscal position remains strong, in line with the Civil Economy framework.
