KUALA LUMPUR: An Opposition MP wants to know if there is any guarantee that the increase in sales and service tax (SST) from 6% to 8% will not result in a corresponding increase in prices of necessities.
Datuk Idris Ahmad (Bagan Serai-PN) said the 2% increase would have a domino effect on various supply chains.
"This will ultimately burden the people who are end users.
"What guarantee can the government provide that the increase (in SST) will not raise prices, especially those of essential goods?" he asked when debating Budget 2024 in Parliament on Wednesday (Oct 25).
On Oct 13, Prime Minister Datuk Seri Anwar Ibrahim announced that a number of tax reforms would be implemented next year to expand the country's revenue base.
Anwar, who is also Finance Minister, said the government plans to increase the service tax rate to 8% but this will not apply to services such as food and beverages as well as telecommunications.
On Tuesday (Oct 25), Datuk Seri Ismail Sabri Yaakob said that it would be more efficient, transparent and fair to reintroduce the goods and services tax (GST) instead.
The former prime minister said raising SST was "not the right move" as it would not generate significant revenue while burdening consumers.
The Bera MP argued that GST, which was zero-rated in 2018 by the Pakatan Harapan government, had proven to be superior to SST.
On Oct 18, former finance minister Lim Guan Eng also previously urged the government to reconsider and postpone the proposal to increase the sales and service tax (SST) as this would affect the people.
