Finance Minister II Datuk Seri Amir Hamzah Azizan says there are no plans to reintroduce the Goods and Services Tax (GST) because it is a form of broad-based consumption tax that could burden Malaysians at the lower-income group.
He was speaking at the parliament during question time in the Dewan Rakyat on Tuesday.
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He was speaking at the parliament during question time in the Dewan Rakyat on Tuesday.
Read more at https://bit.ly/48As2IR
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NewsTranscript
00:00 [Persoanan]
00:25 [Persoanan]
00:30 [Persoanan]
00:35 [Persoanan]
00:42 To improve the quality of life of the people, as outlined in the economic plan, the government needs to reduce the debt,
00:51 especially through the resumption of subsidies and enlarge the interest rate.
00:56 This is because our interest rate is at 11.2% of the GDP, which is among the lowest in the region, compared to Singapore at 12.6%.
01:10 This is usually seen as a low-interest economy.
01:15 Although reformation of interest rates is necessary, the government continues to conduct reasonable research to ensure that the people are not burdened
01:25 and at the same time, the fiscal space remains stable.
01:32 Under the 2024 budget, the government took a more progressive approach as a step to increase state income,
01:41 including through several reformation steps.
01:46 First, the government introduced a tax on unpaid interest rates at a rate of 10%, starting on 1 March 2024,
01:59 in line with the best practice of international taxation and on the principle of social justice.
02:06 Taxes are also imposed on capital asset sales as an additional income to the government,
02:13 in addition to the taxes imposed on the company's income.
02:17 However, this tax is not imposed on individuals who have issued unpaid interest.
02:25 Second, starting on 1 March 2024, the scope of tax savings under the 2018 Tax Savings Act
02:37 is expanded to include new savings such as car-hockey, logistics, as well as brokerage and insurance,
02:45 such as the savings of ship brokers, aircraft carriers, commodities and real estate.
02:53 Savings are also increased from 6% to 8%,
02:56 except for food and drink, telecommunications and parking space.
03:04 The step to reduce savings such as food and drink is progressive
03:09 because it reduces the impact of tax increases on the cost of living of the people.
03:14 Savings tax is estimated to generate an additional RM3 billion.
03:23 Third, the government is now proposing a new law
03:27 to impose a high-value goods tax on the 5% and 10% levels.
03:33 This tax will be imposed based on the set value of the shares set for each item involved.
03:40 This tax is also progressive
03:43 because it is imposed on those who are able to buy high-value goods
03:47 and does not burden low-income groups.
03:52 The government is committed to strengthen the national financial institutions
03:57 with a support to support the agenda of development and prosperity of the people.
04:02 The government is committed to study the tax steps that can increase the results
04:07 without bringing a long-term effect for the future
04:11 with the permission of far-reaching impacts.
04:15 That's all, thank you.
04:16 Alright, I invite Mr. Pang.
04:18 Thank you, Mr. Minister, for answering the question so well and so precisely.
04:22 I am aware, and we all are aware here,
04:25 that the various taxes that are imposed on the people,
04:29 whether it is for certain groups or those who use services,
04:33 the result is for everyone's benefit.
04:37 But what I would like to ask for additional explanation from the Honourable Minister,
04:44 I am sure that what was said earlier is to support the country's fiscal,
04:49 but my additional question is,
04:50 what steps has the government taken and will take to ensure that the people are not burdened?
04:59 And companies that do not take the opportunity to increase their profits,
05:03 the price or the surplus profits,
05:07 given that we see the various progressive taxes being proposed or imposed.
05:15 And next, the Honourable Minister, I would like to ask for this answer to be written,
05:22 namely, I would like to ask the Minister to share the progress of the income increase
05:26 for the next five years,
05:28 to highlight the scope and increase of the tax rates that have been introduced
05:33 for March 1 and also for January 1 last year.
05:37 Thank you.
05:38 Thank you, Minister.
05:40 Thank you, Honourable Minister.
05:44 Honourable Speaker,
05:49 since March 1, 2024, the scope of tax savings has been expanded,
05:55 as is well known,
05:57 covering new savings such as karaoke boxes, logistics,
06:01 brokerage and insurance for the services of brokers,
06:05 including ships, airlines, commodities and real estate.
06:09 Although the tax rate of savings has been increased from 6 to 80%,
06:13 the services that are the basic needs and lifestyle of the people
06:17 are excluded from the tax increase.
06:20 This includes food and drink, telecommunications, vehicle parking and logistics,
06:27 remaining at 6%.
06:30 The steps to address food and drink savings are proof that
06:34 although the government is acting to expand the country's income base,
06:41 the government will not ignore the interests of the majority of the people.
06:45 Our decision to implement the tax reform is progressive
06:50 so that it is less effective and does not burden the majority of the people.
06:55 In considering the tax issue,
06:58 the government will ensure that the reform of the tax rate
07:01 does not give the impression that it burdens the majority of the people,
07:05 especially those who are involved in basic needs
07:08 such as clean water supply and ferry transportation.
07:13 The government will continue to protect the welfare of the people at all times.
07:17 The government will continue to increase the level of monitoring and enforcement
07:22 on any infringers who take the opportunity
07:26 to increase the price of services excessively,
07:30 especially those who are not involved in the increase in the tax rate.
07:36 The Ministry of Home Affairs and the KPDN
07:42 has started the 2024 Impact Ops from 1 March 2024
07:49 to monitor the impact of the implementation of the increase in the welfare tax rate from 6% to 8%.
07:57 The government is not reluctant to take firm action
08:01 if there are infringers who increase the price unilaterally
08:07 and violate the United Nations Convention and burden the people.
08:12 For the data that was mentioned earlier, I will provide it in writing.
08:18 Thank you.
08:20 [German]
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08:37 [Indonesian]
08:44 [Indonesian]
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08:55 [Indonesian]
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09:10 [Indonesian]
09:17 Thank you.
09:18 Thank you, Minister.
09:20 Thank you, Mr. Pakit Kantang.
09:28 Mr. Speaker,
09:31 for your information,
09:34 as Mr. Amok Berhormat Tambun has explained in the opening speech,
09:40 in implementing fiscal reforms,
09:43 the government is taking a progressive approach
09:46 and the context of subsidies is in the process of being implemented.
09:51 The government has not yet proposed to implement GST
09:55 because it is a wide-based use tax
10:01 and therefore it is not the right time to introduce all of them
10:06 given that among the people,
10:08 especially those with low incomes,
10:11 face the challenges of daily costs.
10:15 Although the inflation rate in 2023 is on average 2.5%,
10:21 but for food and drink, it is almost 50%.
10:24 This category is more affected by the general public
10:29 and among the factors, the subsidy rate is retained at 600%
10:34 for food and drink.
10:36 The government will continue to prioritize
10:38 to improve the existing subsidy system
10:42 and introduce subsidies that do not affect the low-income group
10:47 before assessing the need to introduce new use subsidies
10:52 such as GST subsidy.
10:57 To take this approach to meet the need to increase the country's income,
11:03 the government has taken a progressive approach
11:06 by expanding the basis of subsidies to those who have more advanced skills.
11:13 For example, although the subsidy rate has increased from 6% to 80%,
11:20 electricity subsidies are only used
11:24 for domestic users exceeding 600 kilowatts per hour,
11:29 which is the largest group of 15%.
11:34 To save 85% of those users,
11:37 no subsidies are used for electricity bills.
11:41 In addition, water bills are excluded from subsidies.
11:46 At the same time, the government also introduces several other types of subsidies,
11:51 including capital gains subsidies, high-value goods subsidies,
11:56 in addition to expanding the scope and increasing the rate of subsidy subsidies
12:01 to expand the existing basis of subsidies,
12:04 but does not affect the daily lives of the majority of the people.
12:08 Basically, whatever the government's decision,
12:13 the government will ensure that any subsidy steps implemented
12:17 do not have a direct impact on the poor and their welfare will continue to be protected.
12:24 That's all, thank you.
12:25 [Government] Thank you, Mr. Speaker.
12:27 Mr. Prime Minister, I listened to your explanation carefully.
12:32 Thank you for the explanation.
12:34 But if we look at the scope of the SST,
12:38 from the point of view of tax on tax, from the point of view of the interest on interest,
12:42 which is involved in the context of SST, especially in the supply chain,
12:49 for example, from the point of view of the loss, there are many components of services
12:53 that were not taxed in the past, are now taxed,
12:57 in the loss of borrowers, borrowers to the taxpayers,
13:00 taxpayers who send to the end user, there are components.
13:04 So if we look at the government's desire to raise this SST
13:09 and also expand its scope is to get higher results.
13:13 At the same time, we see that the effect of the expansion of the scope
13:17 and also the increase in the SST rate is entirely to all the people,
13:22 although what the minister said earlier is not all involved.
13:25 However, given that throughout the supply chain, tax on tax
13:29 and the transparency of SST is an issue,
13:32 then we see that all the people are affected.
13:35 My question, given that we have experience in implementing SST,
13:39 then GST, then back to SST,
13:42 does the government see the increase in SST and the expansion of the scope
13:46 giving the same effect to the people as when GST was implemented first
13:52 and is there from the point of view of the results,
13:56 this SST results are lower than GST?
14:01 I mean, is it that the SST has the same effect on the people as GST was before,
14:06 but the government's results are lower than GST was first?
14:11 Thank you, Minister.
14:12 Thank you, Minister.
14:13 Thank you, Honourable Vice President.
14:22 Thank you, Honourable Speaker.
14:23 Indeed, the issue of tax increase is an issue that may increase the question mark for everyone.
14:35 But in the government's tax reduction,
14:41 we take into account and approach where we try to reduce the burden
14:47 that will befall the people as a whole,
14:51 especially those from the low-income group.
14:54 In terms of logistics tax, as was asked by the Honourable Vice President,
15:02 in our way to reduce it, we do not apply this tax in areas where there is a B2B.
15:15 So, if we do not have B2B, we do not have tax on tax from the existing structure.
15:21 Secondly, when there is an export business,
15:26 we do not apply the tax on export, we just apply the current economy.
15:32 But the important thing from the government's point of view,
15:34 we also look at where we can give a tax relief.
15:40 As I mentioned earlier, where we look after the low-income group,
15:45 where we do not increase the tax from 6% to 8%,
15:50 or we look at the direct tax cuts in terms of electricity.
15:57 This is an approach from the government
16:01 because we have to remember that the people are not all on the same basis.
16:09 So, we look at where we can and where we cannot.
16:13 In terms of the differences between GST and SST, there are differences.
16:20 But the important thing is we have to look at the ability of the government
16:24 to use the existing tools, which we can do now, with ease.
16:31 But if we find a way to reduce the inequality in the existing system.
16:37 So, in terms of subsidy allocation,
16:40 it is one of the most important targets for the government right now
16:43 because we have to reduce the inequality in the existing system.
16:50 Thank you.
16:51 [BLANK_AUDIO]