The government of Malaysia has reportedly announced its decision to cease the imposition of the SST (Sales and Service Tax) on building materials as well as construction services. As per sources, the decision may have come amidst the backdrop of the fact that the levying of the GST (Goods and Service Tax) had been one of the major reasons responsible for the soaring house costs.
The announcement, as per reports, had been declared by the Malaysian Finance Minister, Lim Guan Eng, who in a public statement, affirmed that the move has indeed been targeted toward the rising housing prices. Elaborating on the exemption, Lim stated that construction materials such as cement, sand, bricks, and more, not to mention, even construction services, had earlier been susceptible to the Goods and Services Tax at 6 percent. However, with the SST exemption and abolition of GST, he says, the unwavering pressure on commercial and industrial buildings as well as home prices is likely to ease out a little.
The Star Online has also quoted Lim to state that the Federal Government has high hopes of construction cost reduction through the exemption of SST.
Reportedly, the Malaysian Malay Contractors Association has claimed the initiative to be a rather smart move for the nation’s housing and construction sector. Datuk Mokhtar Samad, the president of the Malaysian Malay Contractors Association, has stated that this decision would commendably lower the burden that home developers and the Malaysian masses have been facing currently.
Responding to Finance Minister, Lim Guan Eng’s statement, Samad affirmed that the imposition of the GST was undoubtedly one of the principal reasons for the escalating costs of housing. Further justifying his statement, Samad claimed that GST had been pressurizing home developers to purchase construction materials at a very high price, which consequently led to a massive increase in house costs for customers.
As per reliable reports, the exception of the SST for construction materials will officially commence on September 1, 2018.