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Please reduce the SST %. It will help the economy.

If you have read long enough, you may know that I am for GST and against SST. However, I have no wish to debate on this today. Whatever the government of the day has decided, I will accept yeah. Sales and Service Tax (SST) was reintroduced in 2018 and the goods are taxed between 5 to 10% while the services are at 6%. Is this number just right or is it too low (since there is a tax revenue gap between SST versus GST) or is it too high that it should be reduced?

Perhaps the number is just right. However, when the whole nation’s economy is slowing down because of coronavirus, then it may be good to lower the SST tax rate percent so that the effects from the coronavirus to the economy is minimised.

Article in The Federation of Malaysian Manufacturers (FMM) is proposing that Putrajaya reduce the sales and services tax (SST) by 2% for 12 months as part of a measure to minimise the impact of the coronavirus on the nation’s economy. FMM President Soh Thian Lai says that the reduction of the tax will boost business conditions. He said, “This will lead to higher investments and employment opportunities as well as higher disposable income for the rakyat.”

Soh also suggested the following measures too. Electricity and gas tariffs to be reduced for one year to help lower business costs and sustain operations. He added, “We are also proposing for banks to extend payment terms to affected companies by declassifying non-performing loans from three months to six months.” Besides, the government could also reduce the employees’ contribution to the Employees Provident Fund (EPF) to boost domestic consumption too. Please read the Article in

Well, this was what our Finance Minister Lim Guan Eng said just recently: GDP forecast to stay. Stimulus if really needed will be later (click to read) Perhaps more numbers are needed before a decision could be made. Do you agree that the SST be reduced by some percentage points for one year to help the economy? What about lower the electricity and gas tariffs then? Remember the EPF reduction which happened before?

Do you think these proposed measures will be successful? Actually, regardless of the measures, we need to ensure the confidence is growing. Else, reducing tax to make the goods cheaper still does not mean everyone will rush to buy. They may feel they prefer to save the money due to the current prevailing uncertainties. Sentiment is thus very important. Stay focused with more good news maybe. That will help too.

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.


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