MSA reaches out to Customs DG on SST dilemma

Media Specialists Association (MSA) President Yap Chee Weng has sent an official request to the last week’s double taxation issue on SST, affecting Malaysia’s marketing communications industry.

In a circular that is fast gaining traction among MSA members about an issue affecting hundreds of thousands of players in the industry, Yap requested clarification from Dato’ Sri Subromaniam Tholasy, Director-General of Royal Customs Malaysia, “Is media/production cost subject to multi-tiered service tax?”

In the long letter, he outlined the income chain in the industry and how the taxes will affect the entire ecosystem on a scale never seen before, mentioning pass through costs and also referring to how SST was implemented in the past.

He explained, “Double service tax impact further amplifies the business expense for the advertiser.

“Essentially, they’ll pay 6% for pass-through costs on agency invoices, on top of the 6% of the same costs that was levied through the media owner’s invoice.”

“Since advertisers view SST as an additional business cost without input tax relief, compared to GST, they will pass on the additional cost on to the end consumers which may lead to the increase in prices of goods and services, and thereby inflation.”

“We would like to appeal for your urgent intervention to review the draft guide on advertising service to ensure it ultimately does not burden businesses and consumers,” Yap pleaded in his closing.

The story first appeared on this website and has been read by over 10,000 visitors across MARKETING’s digitals assets and quoted by many media platforms.

Nominate Malaysia’s Best Marketers

Do you know a Bold & Brave marketer? Give us their names, because we want to celebrate them.

Held for the first time in Malaysia, the Chief Marketing Officer (CMO) Awards is here to reward the best in the business of marketing.

This award is to identify talent, transparency, tenacity and a take-charge attitude of deserving marketers. An eminent panel of industry leaders will decide on the winners.

There are 30 categories up for grabs at this year’s awards: