Latest news with #Johan
Sinar Daily
14 hours ago
- Business
- Sinar Daily
Expanded SST not new tax, just smarter one, says Treasury sec-gen
SHAH ALAM - The expanded sales and service tax (SST) set to take effect from July 1, 2025 is not a new tax imposed on everyday goods despite the common misconception, but a carefully considered extension of the existing tax framework. Secretary General of Treasury Datuk Johan Mahmood Merican said SST was aimed at improving national fiscal stability without overburdening the public. Clarifying public confusion over the SST expansion, Johan stressed that only about 3,332 new items were being added to the list of taxable goods and services. This represented just 20 per cent more than the existing 6,297 taxable items. "The expansion is being misunderstood as a new tax. "But the reality is many of these items have been subject to SST all along — just not visible to consumers because the tax was absorbed at the manufacturer or supplier level," he said. Chief Secretary of Treasury Datuk Johan Mahmood Merican visiting the Customs Call Centre under the Corporate Planning Division at the Royal Malaysian Customs Department, Kuala Lumpur on Wednesday. He added that the confusion was exacerbated by viral claims on social media suggesting that bizarre items such as seawater, human hair and bones were being taxed. "This tax domain is technical. Yes, these terms exist in the gazette, but they refer to industrial inputs, not items meant for daily consumption," he said. In response to claims that seawater is being taxed, Johan clarified that the items listed in the Customs gazette pertained to pharmaceutical-grade seawater, not ordinary seawater from local beaches. Similarly, human hair was only taxed if it was imported for wig-making or industrial use, not from local barbershops. "Table salt that Malaysians use every day remains tax-free. Only certain premium or industrial salts are taxed. "The same applies to milk, sugar, bread and other essentials — all remain zero-rated," he said. He added that while optional dairy products like yoghurt and butter were taxed at five per cent. This, he said has been in place under the previous SST framework. He said these were not new additions adding that consumers may just now be realising it due to the public attention. Chief Secretary of Treasury Datuk Johan Mahmood Merican during his visit to the Customs Call Centre under the Corporate Planning Division at the Royal Malaysian Customs Department, Kuala Lumpur on Wednesday. While some economists and business groups advocate a return to the goods and services tax (GST) due to its comprehensiveness and higher potential revenue, Johan said SST was a more progressive and balanced approach at this time. "If we reinstated GST, it would generate over RM20 billion annually. "But SST expansion is projected to bring in around RM10 billion for a full year — less than half of GST," he said. He added that GST, by design, passed the full tax burden to the end-user consumer, making it favourable for businesses but more costly for everyday Malaysians. As such, he said the government should widen the revenue base without disproportionately impacting the people or the economy instead. Items newly taxed under the SST included imported fruits and premium seafood such as salmon, cod, lobster and king crab, which will now carry a five per cent tax. These goods, by default, were considered non-essential and as seen in the country's current economic landscape, alternatives existed. "For instance, local fruits remain zero-rated and there's an opportunity here to stimulate local production. "In cases where local supply is insufficient, such as coconuts, imported versions are still tax-free," he said. He dismissed rumours that common seafood like mackerel or tuna would be taxed, further affirming that basic seafood items — prawns, squid, mackerel — all remained zero-rated. Beyond the horizon, Johan assured that the SST expansion will not significantly affect inflation, with the impact estimated at around 0.25 per cent — in line with government projections. "These figures are based on detailed modelling. The idea is to raise essential revenue while ensuring affordability," he said. The additional revenue will in turn support critical government programmes, including Sumbangan Asas Rahmah (SARA) which provided RM100 monthly to over five million Malaysians. Despite an overall positive outlook thus far, one area of concern has been the inclusion of rental and logistics services under SST, which some feared could increase consumer prices. To clear any lingering doubts, Johan said rental services were only taxed for businesses earning over RM500,000 annually, thereby exempting small traders. Chief Secretary of Treasury Datuk Johan Mahmood Merican during an interview with Sinar. Business-to-business exemptions were in place to avoid double taxation, such as between shopping malls and anchor tenants. "For example, if a mall rents to a department store, that transaction is taxed. But smaller kiosks operating under the department store will not face an additional tax," he said. Summing up the rationale behind the expanded SST, Johan said the government has adopted a "targeted, progressive" tax strategy that supported national fiscal policy while protecting lower-income households. "The idea is not to burden the people but to empower the government to fund better public services. "We must be realistic about our country's fiscal needs. But at the same time, we are ensuring basic needs are protected and that choices exist for consumers to avoid any additional cost," he said.
The Sun
2 days ago
- Business
- The Sun
Fiscal reform to balance financial sustainability, social equity: Treasury sec-gen
KUALA LUMPUR: The government's fiscal reform initiatives, including expanding the scope of the Sales and Services Tax (SST) and rationalising electricity and diesel subsidies, are aimed at ensuring fiscal sustainability while protecting lower-income groups and essential sectors. Treasury secretary-general Datuk Johan Mahmood Merican said one of the key fiscal reform elements is the Fiscal Responsibility Act, which aims to reduce the government's fiscal deficit to 3.8% of gross domestic product (GDP) in 2025 and to 3% by 2028. He said that what has gained attention in recent weeks is SST, and the idea is to approach it in a more targeted manner, which Prime Minister Datuk Seri Anwar Ibrahim said reflects the spirit of social protection. 'How do we then try to approach it more progressively? It is the government that needs to provide additional funding. 'We need to increase our tax base as our tax-to-GDP (ratio) is about 12.5%, which is amongst the lowest in this region,' he said during a session titled 'Social Safety Nets: Securing the Future' at the Sasana Symposium 2025 hosted by Bank Negara Malaysia yesterday. Johan said there is room to increase the tax base for the sustainability of expenditure, as well as growing demands for social protection and basic infrastructure. Thus, there is a need to increase the tax base in a progressive manner, where the government must ensure that basic daily goods are not subject to higher SST. He also noted that from an equity standpoint, it appears highly counterintuitive to allocate the same amount of assistance to both low-income and high-income individuals. As such, the government typically adopts a more targeted approach as part of its broader reform agenda to ensure that aid reaches those who need it most. He noted that the government allocated RM10 billion for Sumbangan Tunai Rahmah in 2024, and this year the allocation has increased to RM13 billion, which includes another aid assistance programme called Sumbangan Asas Rahmah. Meanwhile, he stated that while a progressive wealth tax is intellectually appealing and aligned with Islamic principles such as zakat, it presents major challenges in terms of administration, enforcement and data availability. He explained that income and consumption taxes are easier to manage due to the regular and traceable transactions, whereas wealth is harder to assess and value. At a separate event, Johan said SST collection is expected to increase by RM5 billion in 2025 and by RM10 billion in 2026 following the review and expansion of the tax's scope, which will be implemented starting July 1. He said the additional amount is due to the SST review aimed at broadening the national revenue base. 'The government has taken a progressive approach by expanding the tax base, with the tax burden being skewed towards those who can afford it. This means that when determining the scope and those who are subject to the service tax, as well as the sales tax approach, efforts have been made to ensure it is implemented in a targeted manner,' he told Bernama after a visit to the Royal Malaysian Customs Department in Petaling Jaya. The scope of the Service Tax will be expanded to include new services such as leasing or rental, construction, financial services, private healthcare, education, and beauty services. – Bernama
New Straits Times
3 days ago
- Business
- New Straits Times
SST reform aims to balance revenue needs, public impact - Treasury sec-gen
KUALA LUMPUR: The government's approach to the Sales and Service Tax (SST) reform is a carefully calibrated balance between raising revenue and shielding the rakyat from unnecessary inflationary pressure, said Treasury Secretary-General Datuk Johan Mahmood Merican. Speaking at the Sasana Symposium 2025 during a fireside chat, Johan said that applying judgement is necessary at some stage, as the government must balance several competing policy goals. "Firstly, the move toward fiscal reform is, in part, to address fiscal sustainability. A few years ago, our fiscal deficit was higher than ideal. We are working towards a target of 3 per cent, but we're not there yet. This is why there's a need to widen the revenue base. "Secondly, public demands are increasing. This year, we have increased the Sumbangan Asas Rahmah (SARA) allocation by RM3 billion, allocated RM400 million to repair dilapidated claims, and allocated over RM1 billion to recruit additional contract doctors. "There are always demands and therefore there is a need to increase the revenue base," he said. Johan said that in the current climate of heightened uncertainty, it is crucial to maintain fiscal buffers to prepare for any unforeseen circumstances. "It certainly goes without saying that it is challenging to raise RM10 billion without completely insulating everyone. So then it comes to this point: how do you then differentiate items? "I think where we did approach it, we did have some reference to looking at the consumer price index (CPI) basket because, in that sense, in undertaking this increase or review of SST, you've seen some estimates. "I think there was an estimate that it would have an impact on the CPI of about 0.25 per cent. Our internal house estimate is slightly lower than that. "We then felt that that was an acceptable level of increase to say the consumer basket of the rakyat as a whole in trying to achieve that goal," he said. When asked why not consider a more progressive wealth tax, despite its challenges, much like SST or Goods and Services Tax (GST), Johan said that while the idea is appealing for broadening Malaysia's tax base and tackling wealth inequality, it poses significant practical difficulties. He said the challenges surrounding social protection and taxation are not unique to Malaysia, adding that implementing a wealth tax is generally more complex than enforcing an income tax. "Income and consumption taxes are based on regular, trackable transactions. For instance, companies pay salaries, and those are documented, making it straightforward to apply income tax. "Similarly, consumption taxes are based on economic transactions, and by registering businesses, you are able to track those transactions and apply the tax," he said. Johan added that the challenges with implementing a wealth tax are more fundamental, as obtaining accurate data or even securing proper declarations of wealth is not a simple task. He added that while the concept of taxing wealth is intellectually attractive, it poses significant complexities from a tax administration perspective. "Even with targeted aid programmes like Sumbangan Tunai Rahmah (STR), we still rely more heavily on income indicators because the government has much more access to income and transaction data than it does to data on personal wealth," he added.
Yahoo
4 days ago
- Entertainment
- Yahoo
Heidi Klum shares rare photo, videos with son Johan as he graduates high school: ‘My heart is full of joy'
Heidi Klum is a proud mama. The supermodel celebrated her 18-year-old son Johan's high school graduation on Wednesday, posting footage of him getting his diploma and her kissing him on the cheek on Instagram. 'Cheering you on today and every day CONGRATULATIONS JOHAN my heart is full of joy and pride ,' she captioned the sweet post. In a photo she shared, Heidi, 52, smiled alongside Johan and her eldest son, 19-year-old Henry. She shares Johan and Henry as well as daughters Leni, 21, and Lou, 15, with her ex-husband Seal. Heidi and Seal divorced in 2014. She's been married to Tokio Hotel singer Tom Kaulitz since February 2019. While Johan has remained largely private, Leni and Henry have chosen to follow in Klum's footsteps and become models. Heidi did gush about Johan's artistic abilities back in 2013, telling Parents magazine that his love for painting monsters inspired her Truly Scrumptious children's clothing collection. In October, the 'America's Got Talent' judge revealed that Johan was considering attending Parsons School of Design in New York City after graduating. 'Johan is very much into the arts and making clothes,' she told People. 'So today we toured Parsons.' Meanwhile, Seal, 62, spoke to Page Six in February about Henry making his modeling debut at Paris Haute Couture Fashion Week this year, and shared that what he wants to actually do is to pursue a music career. 'But that's difficult because it's kind of what I do, and I think there's a part of him that thinks that, you know, 'I just don't want to be kind of, you know, doing music because my dad does it,'' he said. Still, Seal insisted Henry was a talent in his own right. 'And I don't say that, as, you know, a biased father, which I am, of course, but he has a great voice,' he said. 'And I just really wish that he would have the confidence to do it.' As for Leni, the 'Kissed from a Rose' singer said modeling was also not what she ultimately wanted to do. 'She gets that modeling is a segue,' he noted. 'It's a stepping stone to getting what you want out of life. And it's not necessarily a profession.' Leni and Heidi recently posed in lingerie together for another Intimissimi ad despite receiving backlash the first time they did it in October, with some calling the mother-daughter duo 'weird' for posing in their underwear together. Heidi turned off her comments on her Instagram post announcing the second collaboration. But Leni hasn't been letting the criticism get to her. 'I always try to remember that no matter what you do, there will always be someone who doesn't like it,' she told Glamour Germany about the backlash for their cover story published in March. 'You simply have no control over it and you can't focus too much on the negative.'
Focus Malaysia
6 days ago
- Business
- Focus Malaysia
Finance ministry justifies SST on imported fruits citing local alternatives
THE Finance Ministry of Malaysia defends its decision to impose a 5% Sales and Service Tax (SST) on imported fruits, stating that locally produced fruits, such as bananas, pineapples, and melons from Terengganu and Kedah, are sufficient alternatives, remaining tax-exempt. In an interview with Malaysiakini, treasury secretary-general Johan Mahmood Merican explained that basic goods like chicken, vegetables, rice, flour, bread, and cooking oil are also zero-rated for SST, as they are widely consumed across income levels. According to him, there was a sufficient diversity of locally grown fruits that are available in supply, that is zero percent taxed. He claimed imported fruits are considered 'discretionary expenditures' with viable local substitutes, justifying the tax. Johan further added that the exemption would encourage the consumption of local produce. The domestic trade and cost of living ministry also actively monitors prices to prevent profiteering, with increased enforcement activities and the provision of affordable alternatives through Jualan Rahmah and Agro Madani. —June 14, 2025 Main image: Wellcure
