PETALING JAYA: About 97% of goods in the market will be taxed once the expanded Sales and Services Tax (SST) comes into effect on July 1, increasing pressure on the public, according to Datuk Seri Dr Wee Ka Siong.
The MCA president stated that under the new scheme, thousands of products previously exempt from SST would now be taxed.
"Back in 2018, a total of 8,094 items were SST-exempted but under the expanded SST, people can only enjoy tax exemption for around 1,000 items.
"The SST will apply not only to wellness and beauty products but also to traditional items such as red dates, black fungus, dried longan and snow fungus, along with basic products like butter, cheese and yogurt," he said on Thursday (June 26).
In a Facebook video, Dr Wee highlighted that the SST rate had already increased from 6% to 8% on March 1, 2024.
"What is more concerning about the SST is the cascading effect because it will apply to raw materials, manufacturing machinery and the end product.
"This is why most business associations and guilds, from the rubber, plastics, medicine and oil palm industries to the Federation of Malaysian Manufacturers, have voiced their concerns.
"Although the government seems ready to make a U-turn on the SST for imported fruits, I think it would be better for them to review or scrap it altogether or face the threat of a silent inflation wave in the coming months," said the Ayer Hitam MP.
He added that it was unfortunate the expanded SST would start on July 1, coinciding with the rise of the base electricity tariff and increases in Port Klang tariffs.
The Finance Ministry had announced that the reviewed and expanded SST, as stated in Budget 2025, would take effect on July 1.
The measure aims to strengthen the country's fiscal position by increasing revenue and broadening the tax base.
