KUALA LUMPUR: Consider reinstating the goods and services tax (GST) to increase Malaysia’s coffers, says Datuk Seri Ismail Sabri Yaakob.
The former prime minister said that GST was proven to be far more effective, transparent and fair compared to the current sales and service tax (SST).
He added that the proposal to increase the SST from 6% to 8% is "not the right move" compared to other tax systems.
"Although the increase does not involve the food sector, it will bring a domino effect towards other aspects that will influence an increase in the price of goods as traders will not absorb the costs,” said the Bera MP.
"I restate that it is time for the government to look at reimplementing the GST that was abolished in 2018,” he said when debating Budget 2024 in Parliament on Tuesday (Oct 24).
He added that when the GST was abolished, the country lost approximately RM20bil to RM30bil annually due to the “black economy.”
"Increasing the SST by 2% also only results in an additional revenue of RM3bil for the country," he said, adding that international audit firm Deloitte however predicted the increased SST to add approximately RM900mil.
"Is this worth it when compared to what the people will face?" he asked.
In announcing Budget 2024 on Oct 13, Prime Minister Datuk Seri Anwar Ibrahim said the government planned to raise service tax from 6% to 8% but would not include services such as food, beverages and telecommunications.
Separately, Ismail Sabri questioned the preparedness of the Central Database System (Padu) that would be used to ensure subsidies were given only to those eligible.
"Is the system ready? Has it been tested? We only have two months left before its launch. The next question is who is eligible for subsidies,” he said.
"If the government decides to carry out targeted petrol subsidies, how will the government determine those eligible? Is it through their monthly income or their vehicle's engine capacity," added Ismail Sabri.
He also noted how having rationalised or targeted subsidies was already planned by Datuk Seri Najib Razak during the latter’s tenure as prime minister.
Ismail Sabri said during his tenure as the ninth Malaysian Prime Minister, subsidies were expanded to cover chicken and eggs even though this incurred a big cost.
"Yet now when the prices of chicken are yet to be floated, a national newspaper reported that chicken prices exceeded RM11 per kilogramme. What will happen next year when the price is floated?
"It will surely be harder to control as 70% of the production cost for chicken are from imported chicken feed, apart from logistics, labour, utilities and medication.
"The price of chicken feed is also expected to keep increasing due to the Ringgit’s depreciation," he said.
Ismail Sabri also raised the issue of cartels, adding that five companies were implicated in determining the price of chicken feed.
The Malaysia Competition Commission (MyCC), he said, had also conducted investigations into the matter.
"But until today, there is no verdict. Why is it taking so long," he said.
He also expressed shock at rice supply issues in the market.
"This shouldn't happen. We have stockpiles that can last up to six months. Yet, the current situation seems to show as if we don’t have sufficient stockpiles," he said.
