Zero-rated GST starting June 1

Lloyd Doyle
May 16, 2018

The ministry of finance has just announced that Malaysia's goods and services tax (GST), now set at six percent, will be zero-rated come June 1, in line with the new Pakatan Harapan government's promise to abolish the tax within 100 days of it coming to power.

We've also reached out the Ministry of Finance for comment, and will update this piece with information as we receive it. This excludes goods and services that are now GST exempted.

"As such, all registered business entities have to comply with the GST rate adjustment to 0%". For further clarification, the Royal Malaysian Customs Department is reachable at 1 300 88 8500 or 03-7806 7200.

So what does this mean to the rest of us? Items that have already been GST-exempt will remain as is.

Abolishing the GST was a major promise made by the Pakatan Harapan coalition should they win the May 9 general election.


Ratings agency Moody's said this week that the removal of GST would be credit negative for Malaysia as it would cut off a significant revenue source for the government.

As recently as Monday, Edaran Tan Chong Motor's sales and marketing director Christopher Tan said that auto prices might actually go up slightly if the previous 10% sales tax (which was superseded by GST) is reinstated without changes.

The announcement comes a day after former central bank governor Zeti Akhtar Aziz told Malaysians not to expect the GST removal to happen overnight, saying that it may require parliament approval.

Some analysts fear that the decision would worsen Malaysia's fiscal position, including blowing up the budget deficit, now at 3.1% of GDP.

Other reports by Iphone Fresh

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