KUALA LUMPUR, July 26 — The real objective of the impending sales and services tax (SST) is to increase the purchasing power of Malaysians, Domestic Trade and Consumer Affairs Minister Datuk Saifuddin Nasution Ismail said today.

He said that though the government’s revenue from the SST would be lower compared to the goods and services tax (GST) introduced by the previous Najib administration, the estimated collection would be returned directly to Malaysians.

"The goods and services tax was previously able to provide revenue to the government as much as RM42 billion compared to the SST's contribution where the Finance Ministry estimates the collection to be around RM21 billion only.

"So, the remaining RM21 billion can go to the rakyat where they can have more purchasing power,” he told reporters after launching the Malaysia International Retail and Franchise Exhibition here.

However, Saifuddin said the government must also consider the welfare of consumers before implementing the SST.

The Finance Ministry should review the varying effects of the SST based on the different rates with which it could be levied, he said.

The ministry previously disclosed plans to impose a 10-per cent sales tax and a 6-per cent service tax under the regime dubbed "SST 2.0”.

Saifuddin recommended that the ministry study the tax’s effects on a fixed selection of goods and services covering food, transportation and household expenses, before arriving at a suitable taxation rate.

"So, when setting up the percentage of SST, it is important to consider the information related to the consumers’ basket of goods as this can impact them directly,” he added.

This year, MIRF, organised by the Malaysia Retail Chain Association (MRCA), is venturing into digitalisation to match consumer trends.

The exhibition held at the Kuala Lumpur Convention Centre (KLCC) includes over 150 exhibitors with 300 booths for locals and 35 booths for foreign exhibitors.