KUALA LUMPUR: While Putrajaya claims it is not the time to introduce goods and services tax because people's income is still too low, it is odd that many other taxes have been introduced and expanded, says Datuk Seri Dr Wee Ka Siong.
He pointed out that the Finance Ministry had recently stated that GST would not be implemented, as the people’s income was still too low to be subjected to such a broad-based tax.
“If the Government admits that people’s income is still low, why then increase the Sales and Service Tax (SST) rate from 6% to 8%?” he asked in a Facebook post on Wednesday (Aug 27).
The MCA president, further highlighted the introduction of new taxes, including the 8% digital services tax (DST), the 10% low-value goods tax (LVGT), the 10% capital gains tax (CGT), the proposed carbon tax, the 2% Dividend Tax, as well as higher passenger service charges (PSC) at airports and increased stamp duties.
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Dr Wee, who is the Ayer Hitam MP, said that while GST has been labelled as broad-based, the current SST system also has wide coverage and results in a cascading effect of double taxation.
Citing the Federation of Malaysian Manufacturers (FMM), Dr Wee noted that almost 97% of goods are now taxed under SST.
“Based on the reply I received, it seems the Ministry is overly ‘attached’ to the SST system compared to GST, which is more efficient, transparent, and already implemented in more than 170 countries worldwide,” he said.
Dr Wee also questioned the inconsistency between the Government’s current position and its own official publications.
He pointed out that the Finance Ministry’s Fiscal Outlook and Federal Government Revenue Estimates 2024 report stated that GST was “better and less burdensome” on the rakyat compared to SST.
“Or does the Ministry intend to retract this report and edit it?” he asked.
Reiterating his stand, Dr Wee added, saying, “I still maintain my position that GST is better than SST and I urge the Government to reconsider implementing an improved GST system.”
