KUALA LUMPUR: Goods and services tax (GST) is a more preferable system than sales and service tax (SST), says a business and industry group.
The Malay Businessmen and Industrialists Association of Malaysia (Perdasama) said it believes GST is more transparent and balanced.
"SST will add costs to small and medium enterprises (SMEs) when it is introduced for business-to-business or B2B transactions," its president Mohd Azamanizam Baharon said in a statement on Saturday (Oct 19).
In announcing Budget 2025 on Friday (Oct 18), Prime Minister Datuk Seri Anwar Ibrahim said the scope of SST would be expanded by May 1 to include fee-based financial services and non-essential premium food items like avocados and salmon.
ALSO READ: Targeting the affluent
He also proposed a 2% tax on dividend income exceeding RM100,000 for individual shareholders, with exemptions for dividends from the Employees Provident Fund, Amanah Saham Nasional Bhd, Armed Forces Fund Board and unit trusts.
Azamanizam said the association also believed the 2% tax on dividend income was not right.
"The companies have (already) paid company tax, SST and other taxes.
"Dividends are profits to shareholders who have been waiting for a return on their investment," he said.
While Perdasama acknowledged the government's need to increase income, he urged it to hold more engagement sessions with industry sectors before increasing taxes.
ALSO READ: Dr Wee suggests GST reintroduction under a new name
"A major impact on the country's domestic development will make us non-competitive," he said, adding that the country needs two more years to fully recover from the Covid-19 pandemic.
"We (Perdasama) emphasise supply chain and value chain programmes.
"The business ecosystem should be strengthened to become a platform for providing opportunities, especially to young people to start a business," he said.
