PETALING JAYA: MCA president Datuk Seri Dr Wee Ka Siong has questioned the government’s rationale for maintaining and expanding the Sales and Service Tax (SST) instead of reintroducing the Goods and Services Tax (GST), describing the move as “strange” and inconsistent with the government’s own findings.
Dr Wee said the government had acknowledged that the SST system had been in place in Malaysia for more than 40 years, yet used this as justification for raising the rate from 6% under GST to 8% under SST.
“The government has admitted that the SST has been implemented for over four decades. Is that the justification for replacing a 6% GST with an 8% SST? Strange... very strange,” he said in a statement posted on Facebook on Thursday (Oct 23).
He pointed out that the Finance Ministry’s Fiscal Review and Federal Government Revenue Estimates Report (Fiscal Review 2024) itself stated that GST is a more efficient and less burdensome tax system for the people compared to SST.
“In the same report, the government recognised the advantages of GST. Where is the consistency within the Finance Ministry? If GST is proven to be the better system, why not reintroduce it?” he asked.
Dr Wee also noted that Malaysia now lags behind many countries that have adopted similar tax systems.
“A total of 175 countries worldwide have implemented GST or similar systems. Are we not falling behind by persisting with a tax regime that has been around for over 40 years?” he said.
He further questioned the government’s claim that more time is needed to allow businesses to adjust before GST can be reintroduced.
“The government says it needs time for companies to adjust, but didn’t we already have GST from 2015 to 2018?” he said.
Dr Wee also raised three key questions about the SST’s effectiveness: “Is SST more efficient and transparent than GST? Does it not create double taxation or a cascading effect? And did prices actually decrease after SST replaced GST?”
He urged the government not to dismiss the possibility of bringing back GST, but instead to focus on refining and improving the previous system.
