KUALA LUMPUR: The Goods and Services Tax (GST) is a much more transparent and efficient tax system compared to the Sales and Services Tax (SST), Lim Guan Eng (pix) admitted.
The Finance Minister said the decision to revert to SST was because the impact on the end user was much lesser, due to a single-stage taxation, namely to the manufacturers, compared to the multi-stage GST.
“We can’t deny there are some issues with SST on the aspect of enforcement and possible leakages by manufacturers who will be looking for loopholes in the system, which is why we have tasked the Customs Department to take care of the matter.
“On the issue of transparency, we will also not deny that GST is definitely more transparent. But it must be noted that more is being collected under GST.
“Although SST is not as efficient as GST, the impact on the rakyat is lesser. GST is imposed at every stage of the supply chain while SST is only charged on the manufacturer. That is why prices increased when GST was introduced,” he said during the Minister’s Question Time in Parliament, here, today.
Lim, who is Bagan MP, was responding to a supplementary question by Datuk Ahmad Maslan (BN-Pontian) on the transparency of SST – which is set to be re-introduced by the Pakatan Harapan (PH) government – as compared to GST.
GST was implemented on April 1, 2015 by the Barisan Nasional (BN) government to replace SST then, which was deemed to be outdated.
Lim added that he would reveal how much money was not returned to manufacturers under GST as promised by the BN government, that eventually led to the increase in the prices of many items.
“In due time, I will expose why GST refunds were not returned to the manufacturer,” he said.
Lim also revealed that the SST would only be applied to 38% of selected goods and services, as compared to 60% of items under GST.
He said some of the items that would no longer be taxed include motorbikes below 250cc, bicycles, sardine, dairy products, tea, chilli and tomato sauce, and margarine.