Why is the threshold fixed at RM500,000?
The annual threshold is fixed at RM500,000 to ensure that the small
businesses are GST-free and are not required to bear the costs of
registration (start-up cost and compliance cost) under the GST.
Based on studies, it is estimated that about 78% of the total business
establishments will not fall within the GST system. As such the
consumers has the choice of making their purchases of basic needs from
the businesses which do not charge the GST. Indirectly, the consumers
especially the rakyat residing in the rural areas will not be burdened
by the GST.