THERE is no reason why the government should not reinstate the Goods and Services Tax (GST), since the implementation mechanisms are already in place, says Datuk Seri Dr Wee Ka Siong (BN-Ayer Hitam) (pic).
Arguing that e-invoicing is already part of the existing Sales and Service Tax (SST) framework, he cautioned about the cascading effect it can have compared to the GST, which is used by about 170 countries.
“In any textbook, you can also read how the SST can have a cascading effect.
“That’s why the price of a roti john can go from RM5 to RM8,” he said during a Special Chambers session yesterday.
He also compared the tax earnings between the two.
According to Dr Wee, some RM44bil was collected in tax under GST in 2017, while RM55.9bil was collected last year under SST.
On the SST scope expansion, he said it already encompassed almost the same areas as GST.
“Why don’t we use a more transparent system instead?
“Also, if we continue using the SST but also have the components required for the GST, why can’t we make the switch?
“The mechanism within SST is also present in GST,” he said.
In response, Deputy Finance Minister Liew Chin Tong said the rise in the price of goods is being observed worldwide.
“It happened between 2021 and 2022, owing to supply chain issues and the Ukraine war.
“What we’re experiencing now is the outcome of what happened then. While inflation is low now, prices have gone up and may never reduce,” he said.
He also said the e-invoicing rollout was in phases, noting how the government extended the transition period for 12 months, with it set to end on Dec 31 this year.
“Throughout this period, businesses can produce a consolidated e-invoice with no penalties.”
According to Liew, the GST imposes a greater burden on lower-income groups.
“Companies too are appealing for the GST, as the system is efficient for them. It will be passed on before being eventually borne by consumers,” he said.
However, the deputy minister did not dismiss the possibility of reintroducing GST.
“Firstly, our median wage must exceed RM4,000, and once that happens, we can consider it.
“But for now, where the median wage is only at about RM2,800, everyone will be impacted.
“When we become a middle-class society, we can pursue GST,” he added.
GST was abolished following Pakatan Harapan’s win in the 14th General Election in 2018.
The SST, which has since taken its place, was reviewed and expanded, with the new rates coming into effect on July 1 last year.
