KUALA LUMPUR, Oct 8 — Prime Minister Tun Dr Mahathir Mohamad defended the Sales and Service Tax (SST) in Parliament today, saying its collections would surpass that of the repealed Goods and Services Tax (GST) in the future.
During Minister’s Question Time (MQT) today, the Langkawi MP said the comparatively lower revenue was normal as the tax system was only introduced last year.
“The previous government got advice from a consultant who is not certified, and that’s why they introduced GST. Indeed, we found a shortfall in the collection of tax under SST. However, the shortfall is not because SST is a wrong system,” Dr Mahathir said, in an apparent veiled jab towards Pontian MP Datuk Ahmad Maslan.
In posing his additional question to Dr Mahathir earlier, Ahmad had volunteered to become Pakatan Harapan’s tax consultant for GST.
“Indeed, when a new tax is introduced, at the beginning, there will always be shortfall because of adjustments which have to be made by officers and those paying taxes.
“However, I am confident that in the coming years, SST will exceed GST’s collection,” Dr Mahathir said.
Dr Mahathir said that it was also unwise to constantly change the country’s taxation system, as it would dampen investors’ confidence.
He was responding to a question from Kuala Krau MP Datuk Seri Ismail Mohamed Said, who asked how the government is planning to recover over RM20 billion shortfall in tax collection, owing to the introduction of SST, via its economic policies.
In June last year, Finance Minister Lim Guan Eng announced that the re-implementation of the SST which was abolished during Barisan Nasional’s era in favour of the GST, would see the government losing RM21 billion.
To address this, he said the government would embark on a saving exercise, by reviewing expenditures, and downsizing or delaying projects.