Just received news concerning the new service tax application – mainly to do with the timing and cut-off date relevant to the transition process, from the existing rate of 5% to 6%.
On December 2nd, 2010 the Ministry of Finance jointly with the Malaysian Royal Customs & Excise held a meeting with various professional bodies/trade associations to discuss the proposed transition rules for the change in the service tax rate.
The following image is self-explanatory……
In short…. if any of the customers renewed or purchased a new policy before 1 January, 2011 the service tax rate applicable should be 5% even if the inception date is on or after 1 January 2011. This means insurance customers have an alternative to renew early and save on the 1%.
Something like RAKYAT DI DAHULUKAN!
This would again translate into additional problems for the insurance industry – something we should find hard to resolve as the existing service tax application is based on INCEPTION DATE rather than the DATE OF TRANSACTION.
What do you think?