SST collection less than GST owing to smaller scope, says Finance Ministry

KUALA LUMPUR: Collection of consumption-based tax revenue has dropped following the re-implementation of the sales and service tax (SST) to replace the goods and services tax (GST), says the Finance Ministry.

In a parliamentary written reply, the ministry said after GST was introduced in April 2015, RM37.7bil was collected for the year.

Collection in subsequent years was RM55.7bil in 2016, RM60.5bil in 2017, and RM30.9bil up to May 2018, when GE14 was held.

It added that SST collection was RM5.4bil from September to December 2018; RM27.6bil in 2019, RM25.2bil in 2020, RM25.5bil in 2021, RM31.3bil in 2022, and RM35.4bil last year.

"Overall, GST collection from April 2015 until it was abolished in May 2018 amounted to RM184.8bil while the total SST collection was RM150.4bil between September 2018 and 2023," the ministry said in reply to Salamiah Mohd Nor(PN-Temerloh).

She had asked if tax revenues and national reserves had increased after SST was reintroduced and whether or not it was one of the main reasons for increases in the price of goods.

Comparing the total revenue collection between the GST and SST implementation periods, the ministry said the average annual SST collection was 51.6% lower than the GST owing to its smaller scope.

"SST covers 41% of all goods and services compared to 76% under the GST," the ministry noted.

Aside from that, it said factors such as demand and supply, global commodity prices, prices of imported goods and foreign exchange rates also affected the pricing of goods and services.

Therefore, it said the SST cannot be considered the main reason for the continuous rise in prices.

"In addition, there are also traders and service providers who take advantage by increasing prices to make excessive profits despite not being affected by the imposition of SST," it noted.