KUALA LUMPUR: Malaysia's Prime Minister Najib Tun Razak on Tuesday (Jul 11) announced that the government has agreed that four more services will be treated as zero-rated supply for the purposes of Goods and Services Tax (GST).
The services are prescribed services performed in connection with goods for export where the service is supplied to overseas customers and prescribed services supplied in the Free Zones, including Licensed Manufacturing Warehouses (LMW) to overseas customers.
The other two services are Research and Development (R&D) services provided to overseas customers and non-recurring expenditure incurred as engineering expenses, including tools and machinery used in the manufacturing process of goods.
Speaking at the American Malaysian Chamber of Commerce (AMCHAM) dinner, Mr Najib said in order to accommodate the necessary amendment to the GST Zero Rate Order, a relief from charging of GST under Section 56 of the GST Act 2014 had been granted with effect from July 1, 2017.
“The Malaysian Government has always been supportive in facilitating the business community in Malaysia and welcomes frank and transparent dialogue between all the stakeholders involved,” he said.
Mr Najib said the government also recognised that AMCHAM had been working tirelessly in support of its members.
“As such, the government under Barisan Nasional is committed to ensuring a set of guidelines regarding the exemption of withholding tax which will be announced by the end of July,” he said.
These guidelines would be formulated jointly by the Ministry of Finance (MoF), Ministry of International Trade and Industry, as well as Malaysian Investment Development Authority, together with relevant industry groups and associations to ensure the interests of all parties are taken into consideration.
“A special committee under the MoF will also be established to address any ambiguity or disputes that may arise,” he added.
In response to stabilising the ringgit, Najib, who is also Finance Minister, said Bank Negara Malaysia (BNM) had introduced several measures to realign the US dollar-ringgit demand and supply levels.
He said BNM had implemented this policy with a view to accommodate the business needs of exporters.
“In light of this approach, exporters are allowed to retain 25 per cent of export proceeds in foreign currency, and in addition, are given the flexibility to increase foreign currency balances for up to six months of import payments and foreign currency obligation,” he added.