KUALA LUMPUR (Aug 8): Food outlets such as those selling roti canai, nasi lemak (pictured) and nasi goreng, and earning less than RM1 million annual revenue would be exempted from tax under the proposed Service Tax Bill 2018, said Finance Minister Lim Guan Eng.

Lim, when tabling the second reading of the Bill, said the tax imposition is for services and businesses with a RM500,000 revenue threshold.

"We know Malaysians love their roti canai, nasi goreng, kuey teow, milo ais and dining outside with families and friends. Therefore, restaurants nationwide would be given a concession where they need not charge service tax if their revenue is less than RM1 million a year.

"This threshold is higher than the previous Goods and Services Tax Regime. It will reduce the burden on people if they decide to dine outside while also raising people purchasing power," he added.

The government will also streamline a tax imposition of 6% on accommodation services such as bed and breakfasts, shared accommodation, and serviced apartments and homestays, and food trucks, catering services and retail food outlets.

It also includes business to individual insurance and takaful, hired car services, services in nightclubs, private clubs and golf clubs, add-on services such as applications and games in phone packages, internet services, and paid television.

Lim explained that the streamlining was pertinent to ensure transparency and avoid any loophole manipulation by businesses.

Apart from that, the government is also proposing to impose 6% service charge on gambling activities like casinos, lotteries, betting and racehorse, and chartered flights including helicopter services (not rural air services in East Malaysia), information technology services and electricity supply to domestic users above 600 units monthly, Lim added.

Credit cards, charge cards, and supplementary cards would be charged RM25 service charge annually.

The Service Tax Bill, which would be debated by the parliamentarians, and the Sales Tax Bill that was passed yesterday would go on to form the Sales and Services Tax Regime. The Service Tax Bill encompasses 109 clauses and 13 parts. — theedgemarkets.com

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