PETALING JAYA: The Goods and Services Tax (GST) is not a replacement for the loss in crude oil revenue, says Deputy Finance Minister Datuk Chua Tee Yong (pic).
“GST is a tax system to replace the former Sales and Services Tax (SST),” Chua told The Star in an interview.
Attempting to clear the misconception, he said the RM39mil tax revenue collected from GST could not cover the drop in revenue due to plunging oil prices.
“In 2014, when crude oil price was at US$100 per barrel, the revenue from Petronas, crude oil tax and royalties was RM66bil.
“But in 2016, the expected revenue from crude oil is between RM20bil and RM30bil. If we take the ceiling of RM30bil, that is a minimum loss of RM36bil,” Chua said.
As the additional revenue in the change from SST to GST was expected to be only RM22bil this year (RM39bil – RM17bil), it was not enough to cushion the revenue loss from the drop in crude oil prices, he said.
He pointed out that as such, the Government saw the need to recalibrate Budget 2016.
On the matter of the rise in cost of living, Chua denied that it was solely caused by the implementation of GST as there were other factors such as the ringgit’s depreciation, and rising material and labour costs.