No move to raise SST threshold for construction sector – Ahmad Maslan

KUALA LUMPUR: The government has no plans to raise the Sales and Service Tax (SST) registration threshold for taxable construction services from RM1.5 million to RM3 million, said Deputy Works Minister Datuk Seri Ahmad Maslan.

During the Minister’s Question Time in the Dewan Rakyat, he said the Works Ministry had not submitted any request to the Finance Ministry to review the threshold, despite requests from the industry.

“As of now, there have been no discussions to raise the RM1.5 million threshold. It remains unchanged, and we have no plans to increase it to RM3 million.

“This matter falls under the purview of the Finance Ministry. However, we understand the need to consider a revision if necessary. But so far, there has been no request to do so,” he said.

Ahmad was responding to a question from Abdul Latiff Abdul Rahman (PN–Kuala Krai) on whether the government was prepared to consider the industry’s proposal to raise the SST threshold for taxable services, particularly in the construction, rental, and leasing sectors.

Currently, construction services are subject to a six per cent service tax.

The scope includes all works related to infrastructure, commercial buildings, and industrial facilities. The tax applies when the total value of taxable services reaches RM1.5 million within 12 months, a threshold designed to ease the compliance burden on small and medium-sized contractors.

Meanwhile, Ahmad Maslan said the government does not tolerate delays in project delivery.

He said companies that fail to complete projects even after two or three approved extensions of time (EOT) would be subjected to Liquidated Ascertained Damages (LAD) fines, calculated based on the number of days delayed.

“Delays can cost contractors tens of thousands of ringgit per day. This becomes a serious obstacle. If companies are repeatedly fined for delays, they will not be awarded government projects in the future,” he said.

He was responding to a supplementary question on how the government handles delayed projects where contractors seek additional costs and EOTs, including the case of the Sungai Durian project, which has already been granted three extensions.

© New Straits Times Press (M) Bhd

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