KUALA LUMPUR: The Sales and Service Tax (SST) will burden small and medium enterprises (SMEs) when it is implemented for business-to-business (B2B) transactions, says the Malay Businessmen and Industrialists Association of Malaysia (Perdasama).
The group, which is requesting the government to review the implementation of the SST, said the Goods and Services Tax (GST) is preferred as it has proven to be transparent and balanced.
Perdasama was responding to the Budget 2025 speech by Datuk Seri Anwar Ibrahim, in which he said the scope of the SST would be expanded by May 1, 2025 to include fee-based financial services and non-essential premium food items like avocados and salmon.
He said the SST would not be imposed on basic food items.
Anwar also proposed a 2% tax on dividend income exceeding RM100,000 for individual shareholders, with exemptions for dividends from the Employees Provident Fund, Amanah Saham Nasional Bhd, Armed Forces Fund Board and unit trusts.
Perdasama president Mohd Azamanizam Baharon said the 2% tax on dividend income is not right as companies have already paid company tax, SST and other taxes.
“Dividends are profits to shareholders who have been waiting for a return on their investment,” he said in a statement.
He urged the government to hold more dialogue sessions with the industry before raising taxes.
Mohd Azamanizam also said the country needs two more years to fully recover from the Covid-19 pandemic and if there is a major impact on the country’s domestic development, it would make Malaysia less competitive.
“The business ecosystem should be strengthened to become a platform for providing opportunities, especially to young people, to start a business,” he added.
Source: https://www.thestar.com.my/news/nation/2024/10/21/sst-expansion-will-burden-smes-says-group