KUALA LUMPUR: Prime Minister Datuk Seri Anwar Ibrahim said those advocating the reintroduction of the Goods and Services Tax (GST) were effectively proposing to shift the tax burden from businesses and exporters to the public as a whole.
He said the MADANI government had opted to retain the Sales and Services Tax (SST) as the country's tax system because GST was a broad-based tax that also affected low-income earners, while SST was more focused on the business sector.
"In principle, SST is a tax on businesses, although a small portion of it is passed on to consumers. That is true. But GST is comprehensive. So, I do not understand why those claiming to champion the people want to impose a tax on everyone,” he said during Ministerial Question Time in the Dewan Rakyat today.
Anwar, who is also Finance Minister, said about 2,000 types of goods and services were exempt from tax under SST, compared with fewer than 750 under GST.
Anwar said SST revenue currently accounted for 3.2 per cent of gross domestic product (GDP), the same proportion recorded by GST revenue in 2017, disputing claims that reinstating GST would necessarily boost government revenue.
He said SST would remain the country's tax framework, although the government was open to amendments to address any instances of double taxation and improve the existing system.
"Where there are specific cases involving double taxation, we can make adjustments. I am not dogmatic about economics.
"The system will remain SST, but with some adjustments to improve it. Why not?” he said.
Anwar said a review of GST should only be considered when the people's minimum income had risen to at least RM4,000, to ensure the broad-based tax would not place an undue burden on lower-income groups.
"The government believes that the cost of living remains a burden on the people, and as long as their incomes have not reached a reasonable level, it would not be appropriate to reintroduce GST,” he said. - Bernama
