Penang, Terengganu, And Johor Are Absorbing The GST For Local Authority Services

An increasing number of state governments are starting to absorb the costs of the GST on selected local authority services without the federal government's approval.

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Sarawakians will not need to pay for GST on local government services

Sarawak Chief Minister Tan Sri Adenan Satem says the state will absorb GST imposed on local government services.

Image via TMI

Meanwhile, the Selangor government will request for Goods and Services Tax (GST) exemptions for its 12 local councils from the federal government

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12 May: The government of Johor announced that 16 of the state's local councils have been instructed to stop charging the Goods and Services Tax (GST) for its services after the Sultan of Johor criticised the implementation of tax on public services

The Sultan of Johor, Sultan Ibrahim Ibni Sultan Iskandar.

Image via Tazit Raazali/NST

Johor Housing and Local Govern­­ment exco Datuk Abdul Latiff Bandi said that GST charges had already been absorbed by the state government two weeks after the GST was implemented on 1 April. GST collected during the first two weeks of implementation will be refunded and reimbursed for.

Similarly, the state government of Terengganu has stated it will absorb nine components of services under the local councils starting from 11 May onwards. These services include rentals, leases, and fees.

Image via GE13 News

In Penang, the Penang Island City Council (MBPP) and Seberang Jaya Municipal Council (MPSP) will absorb GST imposed on its local authority's projects, services, and contracts starting from 1 July. It will also include GST collected on behalf of the federal government.

Penang Chief Minister Lim Guan Eng says the Penang Island City Council (MBPP) and Seberang Prai Municipal Council (MPSP) will be absorbing the goods and services tax (GST) beginning July 1.

Image via The Malaysian Insider

Customs Department GST director Datuk Subromaniam Tholasy said on 11 May that local councils are "better off" with the GST system compared to the previous Sales and Service Tax (SST) system, as the provision of federal and state governance, quit rent, and other property tax does not have GST. The department will also meet local councils in Johor to explain GST in detail.

Subramaniam also said that all tools and equipment for persons with disabilities (OKU) have been granted relief from the Goods and Services Tax (GST)

All tools and equipment for persons with disabilities (OKU) have been granted relief from the Goods and Services Tax (GST), says Customs Department GST director Datuk Subromaniam Tholasy.

Image via The Malaysian Insider

Following Subromaniam's believe that local councillors are "better off" post-GST, here are some of the reasons we think that could support his claim:

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