PUTRAJAYA: The government expects to ‘return RM23 billion’ to the people with the reintroduction of the sales and services tax (SST) on Sept 1.
Finance Minister Lim Guan Eng said the new SST would not burden the people as the collection per year was only expected to be around RM21 billion, as opposed to the Good and Services Tax’s (GST) collection of RM44 billion projected by the previous government.
“Compared to the GST collection, the Pakatan Harapan government will be able to return RM23 billion to the people,” he said in a statement earlier.
Lim said Umno and former prime minister Datuk Seri Najib Razak should stop confusing the people by alleging that the SST would burden the people more than GST.
“Umno and Najib should explain how the SST will burden the people,” said Guan Eng.
“Their statements are wrong and very confusing.
“You can’t simply add up the sales tax rate and services tax rate, which would be like equating apple and oranges.
“Umno’s false statement that SST will burden the people more than GST is illogical.
“When the SST was adopted by the Umno-led government before April 1, 2015, it did not cause hardship to the people, the way GST did.
“Unlike the GST, the six per cent service tax only applies to selected services.
“The sales tax is imposed on the manufacturers’ price and importers’ price, while GST was imposed on the final consumer price.
“Hence it is wrong to claim that the 10 per cent sales tax is higher than the six per cent GST.”
He said the Finance Ministry had undertaken a comprehensive SST review exercise with the assistance of the accounting firm, PricewaterhouseCoopers (PwC) tax consultants.
PwC will help to rationalise tax collection and reporting requirements to ensure that the new SST will be more efficient than GST and the previous SST, Lim added.
“PwC will ensure that the SST imposed on Sept 1 will be simpler, less cumbersome, prevent leakages and loopholes.
“The new SST will also be tweaked to ensure that the impact on the lower income group will be proportionately less.”