The Goods and Services Tax (GST) will be reduced to 0% with effect from Jun 1, 2018, according to Malaysia’s Ministry of Finance (MOF).
In a statement on Wednesday (May 16), it said the reduction of the rate from the current 6% to 0% will see nationwide implementation until a further announcement is made.
The change would not include goods and services listed in the GST (Exempt Supply) Order 2014, allowing them to remain exempted from GST.
All registered traders are obliged to comply with the decision while registered businesses will continue to be subjected to all existing regulations, said MOF.
In a separate statement on the following day, MOF said the Sales and Services tax (SST) will make its return.
Meanwhile, Putrajaya aims to cut down on spending to compensate for the shortfall in government revenue due to the cessation of collecting GST.
It further noted that the shortfall would be cushioned by “specific revenue and expenditure measures” that have yet to be announced.
“The Sales and Services Tax (SST) will be reintroduced. Expenditure reduction will begin with rationalisation, efficiency measures and reduction in wastage,” said MOF.