Malaysia Abolishes Goods and Services Tax

Takehome:

Goods and Services tax rate in Malaysia has officially dropped from 6% to 0% since June 1, 2018. The measures are applicable to local and imported goods and services, but do not cover goods and services that have been exempted from GST in 2014 Goods and Services Tax Order.

Businesses will have one month to adjust price tags. After one month, businesses that do not cut prices as required will be subject to severe punishment according to the 2011 Price Control and Anti-Profiteering Law. Ministry of Domestic Trade, Cooperation and Consumerism allows the merchant to maintain the current price tag until June 30, but the closing price and receipt must be 0% GST.

After GST is abolished, Sales and Services Tax will replace it in September. The differences between SST and GST are as follows:

SST will not be implemented until September. Therefore in the next three months, local consumers can enjoy an unprecedented tax-free period. And the abolishment of GST is expected to provide a new stimulus for companies wary of entering the Malaysia CBEC market.