KUALA LUMPUR, July 19 — The Goods and Services Tax (GST) introduced by the previous Barisan Nasional (BN) government is a more transparent taxation system, Finance Minister Lim Guan Eng admitted today.
However, the Bagan MP told Parliament that the new Pakatan Harapan (PH) government’s revival of the Sales and Services Tax (SST) will be less of a burden than the GST on end consumers.
“On transparency, we don’t deny the truth. When asked what is more transparent, definitely GST is more transparent. But if we say GST is more transparent, it can collect more tax widely, which will impact the people.
“SST meanwhile, though not as transparent, as efficient as GST, but the impact on people, especially end consumers, the people who are focusing on, they are the ones who are affected less,” Lim said.
He was responding to an additional question by Pontian MP from Umno Datuk Ahmad Maslan, who had asked Lim to comment on the transparency of the SST, insisting it was not as effective as GST.
Ahmad pointed out that the Ministry of Domestic Trade and Consumer Affairs had said in the Dewan Rakyat last October 30 of a price drop on 230 items after the GST was implemented.
“The Finance Minister said that he wants something transparent. SST is not a transparent system. The people have to pay, but it’s not reflected in the receipts. GST is transparent. What’s your comment?” Ahmad asked.
In a press conference later, Lim said that the delays in processing GST refunds were among the problems that caused prices to spike inordinately.
He explained that while each layer of business is entitled to claim refunds on the tax for input costs, many do not do so due to the complexities involved and the time needed, leading most to simply pass on the burden to the subsequent levels and consumers.
Lim said that when these reasons are disclosed, people will understand why PH opted not to restore the GST at a lower rate than the previous 6 per cent, and instead decided to revert to the SST.
“When I reveal, you will know why we decided not to use GST,” he said.