Prior to being voted into power in the 14th general election, PH had promised that it would abolish the GST within 100 days of forming government. — Reuters pic

KUALA LUMPUR, May 16 — The Goods and Services Tax (GST) will be zero-rated for all items and services in Malaysia from June 1, the Finance Ministry announced today.

The ministry said the GST will no longer be imposed at a rate of 6 per cent from then on, adding that this will be subject to further notice.

“This move to impose the GST at a zero rate takes effect starting from June 1, 2018 and applies to the whole country until further notice,” it said in a brief statement today.

The ministry also said the GST on all locally produced and imported goods alike will be zero-rated, adding that this will not affect goods and services that were already previously exempted from the GST.

The ministry said all registered traders must comply with the order for the zero-rated GST.

“At the same time, registered traders are also still subject to all current regulations, including those relating to the issuing of tax invoices, delivery of tax returns within the prescribed taxable period and input tax credit claims,” it said.

It also reminded traders that they must ensure the prices of their goods and services comply with the Price Control and Anti-Profiteering Act 2011 at all times.

The ministry’s announcement comes almost a week after the Pakatan Harapan (PH) coalition took over as federal government.

Prior to being voted into power in the 14th general election, PH had promised that it would abolish the GST within 100 days of forming government.

Zero rating would essentially remove the price impact of the GST, but retain its tax reporting functions.

The consumption tax was introduced in April 1, 2015 by defeated Datuk Seri Najib Razak’s administration.

Prime Minister Tun Dr Mahathir Mohamad had on May 10 said the federal government will remove the GST and temporarily switch back to the previous Sales and Services Tax (SST) — a regime which PH had said is “fairer”.

Former Bank Negara governor Tan Sri Zeti Akhtar Aziz, who sits on the newly-formed Council of Eminent Persons advising the PH government on the economy and finance, had said the country would still have sufficient revenue even after the GST is abolished.

Zeti said this could be done by re-prioritising projects, improving efficiency, cutting wastage in the public sector and by seeking new revenue sources.