Finance Minister Lim Guan Eng said the Government will also place its trust on retailers and businesses that they will declare their taxes honestly.
He said there are some businesses that are unsure if they are exempted from the SST, so the Government will trust them to do the necessary.
“Let them apply to the (Customs Department) first. If they are exempted, then it is fine.
“However, if we investigate and find that they are not exempted then they will have to pay the taxes.
“That is the soft approach we meant, where we place the trust on them (traders and businesses) first,” he told reporters after a briefing with the businesses and traders here on Aug 18.
Lim said the Malaysia Government was built on a trust platform between the people and the administration.
He hoped that people will not try to evade paying their taxes.
“Tell the truth and we will be able to overcome any issues,” added Lim.
He said the briefing yesterday, which lasted over three hours, was fruitful as many questions were raised on the SST, which is expected to kick in on Sept 1.
Lim said one of the issues raised was on exemption for milk.
Currently, normal milk without sugar is exempted but there are many other types of milk, such as chocolate flavoured milk, said Lim.
“So I was informed about it and I believe milk is important for the development of children, so I will exempt chocolate flavoured milk from SST.
“This is the form of feedback and information that we are willing to listen to and if needed, give exemption as well,” he added.
Meanwhile, in a separate press conference, the Customs Department said it is targeting a collection of RM22bil in revenue for the SST.
The Department’s Director-General Datuk Seri T. Subromaniam said this includes the collection from several new industries that are now part of the Services Tax.
Although he did not name them, the four new industries are gambling activities, airline and charter flight services including domestic helicopter services except those in Sabah and Sarawak, Information Technology (IT) services and domestic electric supply involving a monthly usage of over 600 units.
“Now, we expect a collection of RM22bil from SST, that is the target for Customs, including the new sectors,” said Subromaniam.
Initially it was reported that the collection for the SST would be RM23bil less than the Goods and Services Tax (GST), which was expected to total RM44bil this year.
Subromaniam also said that thus far, his Department has some 77,451 businesses registered under the SST through an automatic system transfer from MyGST to MySST.
From the total, 32,557 are for the sales tax while 44,874 are registered for services.
Traders and businesses, he said, have been notified via emails. However Subromaniam said some of them are not eligible to be registered under MySST.
He called on businesses that are not eligible to be registered to contact the Customs Department and iron out the matter immediately.
Subromaniam also urged some 10,000 businesses that are yet to be registered under SST to do so, adding they could face problems when the SST begins.