KUALA LUMPUR: Datuk Seri Dr Wee Ka Siong says Goods and Services Tax (GST), which is transparent and can effectively reduce tax evasion, is a better taxation system than the Sales and Service Tax (SST).
The Ayer Hitam MP said the Finance Ministry's own Fiscal Survey 2024 (Tinjauan Fiskal 2024) showed GST's superiority.
"The survey states that for SST, the impact ... is only applied at the producer level, which is indirectly accumulated throughout the distribution chain and added to the cost of the product sold.
"While for GST, it is clear that the cost of goods and services can be reduced because traders can claim credit input tax from the government.
"Therefore, the final price may be lower because it is not affected by double taxation," he said in a Facebook video on Tuesday (March 19).
(Double taxation arises for SST, which is imposed on sales (10%) and services (6% to 8%), while GST only has a single tax rate of 6%.)
Dr Wee who is also MCA president, said he understands that the government needs revenue but this should never burden the people.
He said he was inspired to film the video after reading the Statistics Department's report as well as the The Finance Ministry's Fiscal Survey 2024 (Tinjauan Fiskal 2024) and Economic Survey 2024 (Tinjaun Ekonomi 2024).
"The reports ... if read together, has one conclusion – that the people will face hardship," he said.
Dr Wee also said that the forecast inflation rate of 3.6% is worrying.
"This means that the nominal wage increase does not counter the inflation rate.
"Purchasing power of the people will decrease. This will have an impact on the domestic economic chain, which will ultimately affect the lives of the people," he said.
Dr Wee said adding to the difficulties, the department also found that the growth rate for domestic retail sales had gone down.
"The decrease in retail sales has a big implication as it will add to the unemployment rate.
"Stores will cut down on employees and reduce recruitment. There will be a ripple effect," he said.
Dr Wee said new taxes mixed with the increase in water and electricity tariffs would only add to the burden.
"I am not protesting just for the sake of it but as I cannot raise my objections in the Cabinet, I am speaking as a representative of the people," added Dr Wee.
