BUTTERWORTH: The Sales and Service Tax (SST) is a preferred taxation system among small and medium enterprises as it imposes tax at only one level compared to the previous Goods and Services Tax (GST) where tax was imposed at every level, from manufacturers to wholesalers, retailers and consumers.

Malaysia Small and Medium Enterprises (SME) president Datuk Michael Kang said the implementation of the SST was likely to benefit and profit the industry players compared to GST.

“Many of our members did not understand the GST well which resulted in some being penalised for making mistakes.

“As a result, they had to bear the cost, resulting in increase in prices of goods and services offered,” he said.

Kang said there were more than a million operators and manufacturers of goods and services in the country, but with the SST, only 40,000 of them would be involved in the implementation of the SST.

“Under the GST, those who earned RM500,000 annually had to register to impose the six per cent GST charge.

“This is different from SST whereby those who earn RM500,000 or RM1 million annually, but their items and services are not in the tax list, need not register for it.

“Among the exempted businesses are, sewing, servicing of items in the premises, and jewellery,” he said.

He also said that the number of business operaters involved in charging SST would also be fewer compared to the GST.

Kang, however, called on the government to provide a grace period of one to two months for the small and medium enterprises to familiarise themselves with the reintroduction of SST, after it was implemented on Sept 1.

He was met at the SST Structure Explanation Programme at Seberang Jaya Customs Complex here today.

Meanwhile, an entrepreneur from Kepala Batas, Mohd Suhaimi Ahmad, 40, believes that the tax system is only partially responsible for price hike in goods and services offered to the people.

“Anther factor which influences the increase in prices of goods and services is the demand. If the demand is high, then the price will automatically increase.

“Otherwise, the price will be lower,” he said.

Also present was state Customs Department deputy director Tan How Chai.

The four-hour explanation programme was attended by 2,000 SME Malaysia members to get a clearer idea of SST.