Calls for harmonised sales and service tax

Royal Malaysian Customs director-general Datuk Seri Subromaniam Tholasy

PETALING JAYA: The government has been urged to adopt the improved version of the sales and service tax (SST) dubbed the harmonised SST (HSST) instead of reintroducing the goods and services tax (GST).

Royal Malaysian Customs director-general Datuk Seri Subromaniam Tholasy said the HSST has combined the benefits of the GST and SST, and has one harmonised tax rate.

“The GST by far is the best option for the government to collect tax and it is the most ideal consumption tax, but the public do not want to get another price hike if GST is reintroduced.

“The GST is politically sensitive, it will increase inflationary pressure and be open to profiteering by unscrupulous businesses,” Subromaniam said at a virtual event entitled “Harmonised Sales and Services Tax: The Better Alternative to Reintroducing GST”.

Concurring with Subromaniam was Royal Selangor chairman Tan Sri Yong Poh Kon, who said the SST was far more efficient than the GST and could be further improved.

“The SST is far more efficient from the tax efficiency point of view.

“It frees up 400,000 small and medium enterprises (SMEs) as the GST collecting points and every SME can save RM25,000 per annum.

“There are many benefits of the SST. The SST collects 80% of the GST revenue from only 16% of the collecting companies that were under the GST.

“The GST collection totalled RM44bil from 480,000 companies and after deducting RM9bil refunds, the net collection was RM35bil. The SST, meanwhile, collected RM28bil from only 80,000 companies,” Yong said.

While the GST avoids cascading taxes, it also has its pitfalls in terms of complexity and delayed tax refunds, which is why it was replaced by the SST as a single-stage tax.

Yong said whether the SST or GST, it was important that the government made the system simpler for the collectors and the Customs to inspect.

“Many SMEs were affected when the GST was in place because of the different stages of the GST. The biggest problem is the delay of the refund of the GST.

“A total of RM18bil of refunds were not made to 125,000 companies, including Petroliam Nasional Bhd and government-linked companies due to the complexity of the process. So, it was not easy to complete these refunds,” he said.

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3
Subscribe now to our Premium Plan for an ad-free and unlimited reading experience!

SST , GST , harmonised SST , SMEs


Next In Business News

US and UK should be welcoming talent, not driving it away
Short Position: Ringgit rebound, PETRONAS earnings
KWAP seeks stronger income growth
What’s in fashion
Brexiteers, no one wants your regulatory bonfire
EcoWorld redefines concept behind industrial parks
S’pore chips away at HK’s hedge fund dominance
Ringgit seen strengthening further
Hibiscus gets debt boost
Navigating a ‘perfect positive storm’

Others Also Read