Lower Cost of Living
The Ministry of Housing and Local Government expects housing prices to be part of the people’s will to come down with the re-introduction of Sales and Service Tax (SST) this September, announced by the Prime Minister Tun Dr. Mahathir bin Mohamad.
Its deputy minister, Datuk Raja Kamarul Bahrin Shah Raja Ahmad said the decline was caused by components and construction materials that were no longer charged as in the previous Goods and Services Tax (GST) practice. However, he said, for this beginning, it was difficult for the government to anticipate as much as the impact of the decline so that the people have to wait and see after the new implementation. “SST will not contribute so much to the increase in home price over GST as all development components including iron, cement, timber and any construction materials are charged,” he told the reporters.
Recently, the Finance Minister, Lim Guan Eng announced SSTs to be presented in Parliament next month proposing 10% for sales tax and 6% for service tax. Guan Eng added that the SST is expected to generate RM4 billion in revenue to the government for 2018 and the proceeds will be used to cover some government losses of RM21 billion after abolishing GST from June.
In the same development, Raja Kamarul Bahrin Shah called on the state government to work with the ministry to ensure that the objective of providing affordable housing to the needy would be achieved. He hoped the opposition-governed state government could make efforts to reduce the cost of home purchase.