KUALA LUMPUR, July 20 — The Goods and Services Tax (GST) was so much more efficient than the Sales and Services Tax (SST) that it caused ordinary Malaysians to be burdened with tax, Finance Minister Lim Guan Eng said in jest today.
Lim concluded that the GST resulted in more Malaysians paying more taxes and their cost of living going up.
“As a federal government that is committed to speak the truth based on facts and figures, I am ready to state that GST may be more transparent and efficient when compared against SST,” he said in a statement today.
“This is because GST was successfully imposed on more tax payers, including the ordinary people to the extent that GST succeeded in collecting tax of RM44 billion compared to the RM21 billion collected by the SST.
“The additional RM23 billion from this GST burdened the public to the extent that their cost of living was affected,” he claimed.
“GST was more efficient and transparent when it was imposed on 60 per cent of the CPI basket of goods compared to only 38 per cent of the CPI basket of goods under SST,” he said, referring to the items commonly used to measure inflation via the Consumer Price Index (CPI).
He then went on to reiterate that GST’s replacement with SST would allow for the RM23 billion collected under GST to be “returned” to Malaysians.
The Pakatan Harapan (PH) coalition, which is now heading the federal government, had pledged in its election manifesto to abolish the GST, which was imposed at a tax rate of 6 per cent since April 1, 2015.
Shortly after coming to power, the PH government announced that the GST would be zero-rated for three months from June 1.
The SST system will be brought back on September 1, with a sales tax of 10 per cent and service tax of 6 per cent.