ALOR STAR, Sept 10 – Plastic bags used by distributors and traders to pack rice will also be exempted from the Sales and Service Tax (SST), Finance Minister Lim Guan Eng said. It is to ensure that the distributors would then be able to reduce the cost of packaging rice, which is among the items exempted from SST.
“There is a request from the distributors and traders not to tax the plastic bags and since rice is exempt from taxes, we will also exclude the plastic bags for rice from being taxed. We hope this will reduce their costs,” he said.
Lim was speaking at a press conference after delivering a SST briefing to more than 500 traders and representatives of business associations at a hotel here which was also attended by Customs Department director-general Datuk Seri T. Subromaniam.
Earlier, during the session, there were traders who had raised the plastic bag issue claiming that they would have to spend almost RM1 million to buy the before SST part from the cost for rice.
Lim also said that the government would also exempt the management and maintenance services charges from SST equally for homes with strata titles as well those with non-strata titles. Lim said previously only the former was exempted from the Goods and Services Tax (GST) to encourage homeowners to apply for strata titles.
“We have to bear in mind that it is not the owners who do not want to apply (for strata ownership) but it could be problems related to bankers and financing, so the government does not feel it is necessary (to charging SST for management services charges for residential owners without strata titles),” he said.
Commenting on the price of imported vehicles after the implementation of the SST, Lim said the government had given tax exemptions to companies that were re-assembling vehicles in the country if they used local components.
“To encourage them to use local components, the government granted them exemptions to exclude the Industrial Linkage Programme (ILP) costs, so that when the ILP is removed from the price for sales tax purposes, its impact would be lesser than the during the GST and SST 1.0 period.
“That’s why the response of the automotive industry is very positive. They respond by reducing the price of their respective vehicles, but that’s only for vehicles that have local inputs, and if there are higher local inputs, the costs would be a lot lesser,” he said. — Bernama