Malaysia's Senate passes Sales and Service Tax Bills and repeals GST

A goods and services tax (GST) notice displayed at a supermarket in Aeon Bukit Indah Shopping Centre in Johor Baru, on March 31, 2015. The move brings to an end the unpopular 6 per cent GST that was introduced in April 2015. PHOTO: ST FILE

KUALA LUMPUR - Malaysia's Upper House of Parliament, controlled by opposition Barisan Nasional (BN) senators, approved the Sales and Services Tax (SST) Bills without much fuss on Monday (Aug 20), despite earlier expectation that these would be delayed.

The Lower House, controlled by the ruling Pakatan Harapan alliance, passed both Bills earlier this month.

But there had been some concern in the PH government that the BN-majority Senate could block or delay the Bills' passage.

The Upper House, comprising 55 senators, also repealed the goods and services tax (GST) on Monday. The move brings to an end the unpopular 6 per cent GST that was introduced in April 2015.

BN currently has 33 senators, opposition faction Parti Islam SeMalaysia three, and the Pakatan Harapan alliance six. A Bill passed by the Lower House must be okayed by the Upper House before the Malaysian King will assent to it.

With the smooth passage on Monday, the SST is expected to become law by Sept 1 as planned by the PH government.

The Senate debate was closely watched on Monday as this was the first time that the two Houses are controlled by different political alliances.

In the past, BN controlled both Houses, making it a breeze to pass legislation.

But there was little opposition on Monday in the Upper House, with BN Senator Ong Chong Swen saying that debate over the Sales Tax Bill had little meaning as a finance or a taxation-related Bill, also known as a "money bill", can be implemented without the Senate's approval.

With the easy nod on Monday, Adib Zalkapli of political risk consultancy Vriens and Partners said: "There is a leadership vacuum among the BN senators. Without leadership and organisation, BN's majority in the Upper House is useless."

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