ALOR STAR: Kedah Umno has joined the chorus in calling for the Madani government to reintroduce the Goods and Services Tax (GST) following the public outcry over the upward revision of Sales and Services Tax (SST) rate.
Information chief Datuk Shaiful Hazizy Zainol Abidin said the expansion of taxable services and two per cent hike in service tax rates that took effect on March 1 had received criticism from many quarters.
"The SST hike by the Madani government has received many criticisms by many quarters including the people after many businessmen and companies have increased their price and services.
"Although the (SST rate) increase is just two per cent, in reality the price of goods has increased by almost 10 to 20 per cent.
"This is the ugly side of SST as this tax system is not transparent and easily manipulated," he said when contacted.
Shaiful, who is also Merbok Umno division chief, was responding to calls by experts in economics and politics insisting that it was high time for the Pakatan Harapan-led unity government to swallow the bitter pill and reintroduce the GST.
They said the GST, which was introduced by the Barisan Nasional administration in 2015 before being discontinued by the PH government in 2018, had been proven as a better taxation system as compared to the SST.
Shaiful believes now is the best time to revive the GST and that the move would be met with a more positive response from the people.
"The people themselves are asking the government to change from SST to GST, they have begun to understand the advantage of GST over SST.
"The opposition, the people are supporting (for GST reintroduction). The government should take the opportunity under the current political climate to reintroduce the GST, the more transparent taxation system compared to SST," he said.
Shaiful added that GST not only reduced the cost of doing business, but it also ensured appropriate rates for customers, and most importantly, it was a more transparent taxing structure.
"As the saying goes, better late than never. They may be seen as making an about turn, but if this is for the benefit of the people and the country, what is wrong with it?
"The longer we wait, we are incurring more losses," he said.
The government has increased the service tax by two per cent from six to eight per cent and expanded the taxable service scope beginning March 1, 2024.
Following the move, Consumers Association of Kedah (Cake) has urged the government to conduct a thorough study on the impact of the SST rate hike on consumers, while expressing concern over the snowball effect of the tax hike on end users.
On Tuesday, former finance minister Lim Guan Eng urged the government to review the two per cent service tax hike and the high-value goods tax.
The Bagan member of Parliament has stressed that the government should postpone tax measures that burden the people, at least until the economy improves.
On Thursday, former prime minister Datuk Seri Ismail Sabri Yaakob supported calls to reintroduce GST to avoid the increase on prices of goods due to inefficient taxation systems.
On Saturday, MCA president Wee Ka Siong questioned why the Madani government did not implement the GST.
The Ayer Hitam MP has pointed out that the GST was far more effective and less of a burden than the current SST implemented based on the Madani government's own fiscal outlook report for 2024.