KUALA LUMPUR: Former MCA president Datuk Seri Dr Wee Ka Siong is maintaining his stance that the government should reinstate the goods and services tax (GST) to resolve concerns surrounding taxation policies.
In trying to boost the economy, he said, the government must seriously consider the leverage that GST offers, particularly in enhancing transparency and reducing tax evasion.
In a social media post, the Ayer Hitam member of parliament said insights based on the 2023 fiscal and economic report published by the Finance Ministry detailed implicit suggestions that favours the implementation of GST over sales and services tax (SST).
"The differing consumer impact characteristics between the two is apparent. SST, being levied solely at the producer level, indirectly accumulates throughout the distribution chain, adding to the tax burden embedded in products.
"In contrast, GST allows for the reduction of costs as businesses can claim input tax credit from the government, thereby potentially lowering final prices," he said.
Wee added that the government must revisit its move of introducing abrupt taxation policies that could burden the people and strain the economy further.
"The country needs a gradual implementation process by allowing sufficient time for preparation and adjustment."
In addition, Wee highlighted that the recent nominal increase in Malaysian wages has sparked concerns as it has decreased to 2.9 per cent for the service sector and 3.3 per cent for manufacturing.
This decline, he said, comes in stark contrast to the robust rates observed in the third quarter of 2022, with wages soaring at 6.7 per cent for the manufacturing sector and 9.1 per cent for the service sector.
Particularly worried about the downward trend in nominal salaries, especially when juxtaposed with the 2024 economic outlook report, he forecasted a troubling inflation rate.
"It is evident that the current wage increase rates are failing to keep pace with the escalating cost of living, with inflation eroding purchasing power.
"To illustrate, consider an individual earning RM2,000 per month. With a nominal salary increase of only 2.9 per cent, their new monthly salary would amount to RM2,058.
"However, with inflation projected at 3.6 per cent, their living expenses would rise by RM72, resulting in a new monthly cost of living of RM2,072.
"This disparity between wage growth and inflation poses significant challenges to household finances and consumer purchasing power, ultimately impacting the wider economy," he added.
Wee said that if the government does not put in adequate measures to address this discrepancy, the economic well-being of Malaysians could be at risk.
He added he felt compelled to shoulder his responsibilities as a regular Member of Parliament from the government bloc without fear or favour.