Malaysia: Non-life sector gets a three-month tax holiday
Source: Asia Insurance Review | Jul 2018
Malaysia Property & Casualty Regulation
Malaysia will implement the sales and services tax (SST) with effect from 1 September to replace the goods and services tax (GST), announced Prime Minister Mahathir Mohamad.
The 6% GST has been zero-rated since 1 June, effectively removing it for consumers, while the SST could be set at 10%. Former Prime Minister Najib Tun Razak’s administration, had replaced the SST with the GST on 1 April 2015. The previous SST rate had been 10%.
The changes mean that Malaysians will enjoy a three-month tax holiday from sales tax. Estimates are that the tax holiday will put MYR11bn ($2.8bn) into the hands of Malaysians.
Sun Life Malaysia CEO and president Raymond Lew said zero-rated GST and the tax holiday will benefit consumers. This can be an incentive for consumers to make an insurance purchase, he said.
Previously, insurance providers had to charge GST for the provision of non-life insurance coverage including insurance, medical and health insurance and certain critical illness insurance and total permanent disability insurance). But life insurance policies were classified as exempt supplies and therefore premiums paid were not subject to GST. A