Budget 2024 – Service Tax, Capital Gains Tax and tax for watches and jewelleries too…

Budget 2024 – Service Tax, Capital Gains Tax and tax for watches and jewelleries too…

Three actual facts for everyone to ponder

#1 The concept behind GST was invented by a French tax official in the 1950s. In some countries it is known as VAT, or Value-Added Tax. Today, more than 160 nations, including the European Union and Asian countries such as Sri Lanka, Singapore and China practice this form of taxation. Info Source: Royal Malaysian Customs Department

#2 The goods and services tax (GST) is better than the sales and services tax (SST) because the GST widen a country’s tax base and brings in more revenue, said the World Bank Group lead economist Dr Apurva Sanghi. Source: bernama.com

#3 What Are the Benefits of the GST?

The GST can be beneficial as it simplifies taxation, reducing several different taxes into one straightforward system. It also is thought to cut down on tax avoidance among businesses and reduces corruption. Source: investopedia.com

Now, let’s look a few new taxes in Budget 2024

Yeah, I know, everyone hates the 6 percent but it’s now higher

In Budget 2024, it has been announced that the Sales and Services Tax (SST) from six per cent to eight per cent, though it will not include food and beverages or telecommunications. PM Anwar Ibrahim also said, “We have also expanded the scope of the taxes to include logistics, brokerages and karaoke services.”

I do wonder if everyone would sing at home instead of the karaoke centres? Okay, I would not. I will still visit the karaoke occasionally. Meanwhile, I do wonder how easy / hard it is to do all these segregation based on food and beverage. Is chicken (not fried) considered food? Is 3 in 1 coffee considered beverage? Is chilli / tomato sauce considered a food? Perhaps all these would just be excluded lah, easier. Let’s wait for the implementation and we will know for sure.

Unlisted shares will also be taxed

A capital gains tax on unlisted shares will also be introduced at a rate of 10 per cent from March 1 2024.

According to Investopedia, this is definition of unlisted share (security):

An unlisted security is a financial instrument that is not traded on a formal exchange because it does not meet listing requirements. Trading of unlisted securities is done on the over-the-counter (OTC) market and they are often called OTC securities. Market makers, or dealers, facilitate the buying and selling of unlisted securities on the OTC market. Do read here for full reading from investopedia.

Jewellery and Watch? These may be under high-value goods tax too

Jewellery and Watch are known as high-value goods and will get a tax of five to 10 per cent on them. I own just one watch which is over RM1,000. Brand is Tissot. All other watches are below RM1,000. So, I do think if the watches will get taxed, my kind of watch brands would not get it lah. I can continue to buy. Meanwhile for jewellery, this one have to wait for more details. I wonder if they would tax based on the item type or the value of the item.

Still no sight of GST (Good and Services Tax)

I think if you have followed the GST news for some time you would know why it’s not easy for the current government to reintroduce the GST. There are already some introductions, some statements, some views from some of the key figures in the current government but for Budget 2024, GST will not be introduced, yet. I say yet because GST is the better tax and it’s definitely better than the current SST in terms of coverage. We buy, we pay tax. The government can then choose how to ensure the needy gets subsidies. No need to wonder if the government can do a good job or not, GST is not back, so there’s no need to debate on this yet. As for Services Tax….

All the best to all of us for 2024. I think it will be a good year regardless of all these new taxes.

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