KUALA LUMPUR, July 21 — The multi-stage Goods and Services Tax (GST) at six per cent collects more tax than the single-stage Sales and Services Tax (SST) at 10 per cent, DAP’s Tony Pua said today.

The Damansara MP gave an example of an RM10 item, which would be taxed RM1 on just the manufacturer under the SST, compared to RM1.20 under the GST where each stage of the sale process would be taxed from the manufacturer to the wholesaler, distributor, and retailer.

"The example above shows that the GST is a more complicated taxation system that is not easily understood and is more burdensome on all parties in implementation and management, compared to the single-stage SST,” Pua said in a statement.

Malaysian Association of Tax Accountant (MATA) president Datuk Abd Aziz Abu Bakar told Utusan Online that SST would cause prices of goods to rise because manufacturers would raise their sale prices to cover the SST, which would subsequently cause further increases down the line and affect the final retail price.

"Based on the example given by Datuk Abd Aziz above, the amount of tax collected by the government is only RM1 from the sale price of RM10 from manufacturer to wholesaler.

"However, the government will not collect further tax from the wholesaler, distributor or retailer. This means that the sale prices between the wholesaler, distributor and retailer at each stage of the sale process are subject to market forces,” said Pua.

The DAP publicity chief claimed that implementation of the GST since 2015 had caused a drastic hike in inflation, saying that inflation rose to 3.1 per cent after the consumption tax was implemented, compared to 1.7 per cent and 2.1 per cent in 2012 and 2013.

He said inflation fell to 0.8 per cent last month compared to 1.8 per cent in May, after the GST was effectively abolished from June 1. The GST was introduced by the previous Najib administration in April 2015.

"This is the lowest inflation rate since February 2015 and the reduction of inflation was obviously caused by the repeal of the GST.”