Dept to review service tax on maintenance fees
The Star 11/08/2001 By K. Suthakar

PENANG: The Customs and Excise Department has deferred the collection of 5% service tax on maintenance fee for high-rise buildings imposed by developers, management corporations and property managers.

Deputy Finance Minister Datuk Chan Kong Choy said yesterday the department was reviewing the tax following problems in implementation and appeals from various quarters.

"We are re-looking into this and a decision will be made soon," he told newsmen after a briefing at the state Customs and Excise Department.

Also present were the department's director-general Datuk Abdul Halil Abdul Mutalib and state director Zainol Abidin Din.

Abdul Halil said the service tax was imposed since January 1998 for those collecting maintenance fees exceeding RM300,000 annually.

He said the main problem was that some had failed to collect the tax from property owners. "It is unfair to scrap the tax altogether as some had already paid up and the money will not be refunded.

"Whatever it is, we will make a decision quickly and it will probably be announced in the coming national Budget," he said.

On another matter, Abdul Halil said the department would take delivery of 12 mobile X-ray machines costing about RM70mil, from November until the middle of next year, to check smuggling.

He said the machines would be used in 12 "sensitive" areas nationwide to check cargo in containers and trailers.

Abdul Halil said there had been cases of certain quarters bringing in used cars from countries such as Japan and Britain but declaring them as spare parts.

"There are also cases where half a car is shipped in first followed by the other half in another shipment also under the guise as spare parts.

"The cars are assembled later. This is done to evade the payment of import tax ranging between 120% and 320% and also 10% sales tax," he said.

Earlier, Chan commended the state Customs and Excise Department for collecting RM557.24mil revenue in the first seven months of the year.

He expressed confidence that the department would be able to collect more than RM1bil in revenue this year.