No reason to reinstate GST.
The collection from Sales and Services Taxes (SST) will surpass that of the now-abolished Goods and Services Tax (GST) in the next few years, the Dewan Rakyat was told.
Prime Minister Dr Mahathir Mohamad said while the government expected a shortfall of over RM20 billion this year under SST, almost half of GST’s annual collection of RM44 billion, he assured that this was usual for any newly-introduced taxes.
“This (shortfall) was not due to mistakes in the implementation of SST. When any new taxes are implemented, collection from that tax will experience some shortfall in the beginning. This is due to adjustments that need to be made.
“I’m confident in the coming years, collections from the SST will be higher than GST,” he said in response to a question by Ismail Mohamed Said (BN-Kuala Krau) on the expected shortfall under SST and if the government has policies and plans to address this.
Dr Mahathir said collection from GST was higher as consumers and businesses were charged multiple times which has caused uneasiness.
“In comparison, SST has been implemented for so many years (before GST was introduced in 2015) and there were never any problems. That was why we decided to revert to SST.
Ma’mun Sulaiman (PH-Kalabakan) asked whether the government is ready to reintroduce GST should the people demand it.
“SST is in place. We only need to improve it. There’s no need to revert to a tax regime that was rejected by the people,” Dr Mahathir replied.
Ma’mun said public opinion on the tax is divided.
Dr Mahathir said GST burdened taxpayers, citing as an example delays in getting refunds, which affected businesses.
In reply to a supplementary question by Noor Amin Ahmad (PH-Kangar) on SST’s ability to control payment defaults by businesses, a problem when GST was in place, the prime minister said he is confident the issue will not arise under the current tax regime.
“Actually, there is no tax evasion… SST has been around for some time and faces no problems.
“(I am confident that) if managed well, (SST) can be better than GST.”
Dr Mahathir said changes on tax systems shouldn’t be made frequently as it would impact the investors’ confidence, which would portray a bad image of the country.
On the offer made by Ahmad Maslan (BN-Pontian) on Monday for free GST consultation should the government revert to GST, Mahathir jokingly said: “Thank you for the offer, but the government will be destroyed if we accept you as consultant.”
Deputy Finance Minister Amiruddin Hamzah had said SST was projected to collect RM22 billion this year, half of what GST collected every year, prompting calls for the government to review the new tax system.