Sales Tax Bill clears Senate hurdle after three-hour debate (updated)

  • Nation
  • Monday, 20 Aug 2018

KUALA LUMPUR: Fears that Pakatan Harapan’s move to abolish the Goods and Services Tax (GST) and replace it with the Sales and Service Tax (SST) would hit a snag in Dewan Negara diminished after the first of the five related bills was passed by a majority voice vote on Monday (Aug 20).

The Sales Tax Bill was passed after about three hours of debate.

Finance Minister Lim Guan Eng in his winding-up speech said the government was prepared to consider views raised by senators during the debate and will expand the list of exempted items under the SST and/or include items to be taxed.

“We are prepared to listen and accept the views which were raised by senators. Whether you want it to be included or not, you can submit it in writing to the Ministry or to the Customs Department," he said.

Lim was responding to a question made by senator Bathmavathi Krishnan, who requested that associations for persons with special disabilities be allowed to import equipment and oxygen tanks free of SST.

Senator Datuk Ong Chong Swen wanted to know why certain luxury items such as jewellery, Norwegian lobster and pate were excluded from the SST.

Lim also said that he could not give a guarantee that prices of items will go down following the implementation of SST.

"I never said that the SST will lower the prices of goods but that the effect would be less than GST. I do not want to be like a former Finance Minister who made predictions that prices will go down when GST was implemented," said Lim

He explained that the prices of goods when the SST is implemented would also be determined by other structural factors, including global oil prices.

Asked by senator Khairul Azwan Harun, whether the government would announce lower corporate tax in the upcoming Budget for local companies, Lim said that it would depend on the fiscal and financial status of the government.

"At the moment, we are unable to do it but this is the direction we are headed to," he said, adding that lower corporate tax would spur private sector participation in driving the nation's economy.

Earlier, Lim said that the government hopes that more people will be able to enjoy the RM17bil which will be returned to them this year, and an additional RM23bil next year, following the abolishing of GST.

He added that prices of goods would be monitored when the SST is implemented although the increase will not be as high as the GST.

"At the same time, the federal government is studying structural problems in the domestic economy such as the power of monopoly which is burdening consumers," he said.

The Dewan Rakyat passed the Sales Tax Bill 2018 on Aug 14 and the Service Tax Bill 2018 on Aug 15.

There are 33 Barisan Nasional and three PAS senators, out of 55 in Dewan Negara.

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