KUALA LUMPUR, July 18 — Tan Sri Annuar Musa rejected today Finance Minister Lim Guan Eng’s use of lower tax collections projected under the Sales and Services Tax (SST) to indicate it is better than the consumption tax, saying it will only encourage tax evasion.
The Umno secretary-general and his party have honed in on the government’s plan to repeal the Goods and Services Tax (GST) and replace this with the SST, saying the move will be regressive to the economy and harmful to consumers.
“You tax more on rakyat now but you use lesser collection AS PROOF that you are taxing less now!! (The) rakyat are not stupid.
“YOU GOT LESS COZ U OPT FOR SYSTEM WHERE TRADERS CAN EASILY CHEAT AND EVADE TAX...you are PRO TAX EVADERS N RICH TRADERS and burden the POOR!!” he wrote on Twitter today.
Yesterday, former Umno president Datuk Seri Najib Razak also warned that the move to re-introduce the SST in September will be a “double whammy” for the public, after reiterating claims that the zero-rating of the GST has not resulted in any significant price reductions.
The opposition party maintains that prices will surge once the sales tax is implemented in September, with businesses passing on the tax burden directly to consumers.
Umno has taken a leaf out of Pakatan Harapan’s playbook from before the general election and is using the tax regime swap to attack the new ruling coalition.
The crux of their criticism is that the repeal of the GST would remove the mandatory tax reporting structure that reduced firms’ ability to under-report tax obligations, all without tangibly lowering prices.
They have also used a conflation of the 10 per cent sales tax and 6 per cent tax on services to suggest that the SST, which is the same system that the GST superseded in 2015, will be more burdensome than the consumption tax.
