In a brief statement, Finance Minister Lim Guan Eng said such items and services were previously subjected to the 6% good and services tax (GST), which led to the increase in construction costs and subsequently a rise in house prices.
With the exemption, Lim hoped that construction costs could be reduced and the pressure on house prices, industrial and commercial buildings would be eased.
“With the proposed exemption of goods from SST and the difference in GST implementation, I hope both the developers and the buyers can benefit from the reduction of this tax burden.”
The announcement today comes days after Lim declared the GST officially “dead” after the bill to repeal it was passed in the Dewan Rakyat – three years after its implementation.
The GST is expected to be replaced by the SST.
The Sales Tax Bill 2018 and Service Tax Bill 2018 have been passed by the Dewan Rakyat.
SST is a single-tier tax regime that the government hopes to implement on Sept 1. It plans to charge 10% for any taxable goods and 6% for any taxable services.
A total of 5,443 items would be exempted from SST, compared with GST’s 540 items.