The Goods and Services Tax (GST) should be reintroduced to boost the country's revenue, says Datuk Seri Dr Wee Ka Siong.
Speaking at the inaugural Insap Economic Forum (IEF) on Friday (July 12), the MCA President emphasised that if GST had not been abolished, the government would have collected RM63.5bil, nearly double the RM35.8bil expected from the Sales and Services Tax (SST) in 2024, demonstrating GST's superior efficiency.
The Ayer Hitam MP also stressed that the rationalisation of the RON95 petrol subsidy must be implemented carefully to avoid burdening the people.
WATCH MORE: https://thestartv.com/c/news
SUBSCRIBE: https://cutt.ly/TheStar
LIKE: https://fb.com/TheStarOnline
Speaking at the inaugural Insap Economic Forum (IEF) on Friday (July 12), the MCA President emphasised that if GST had not been abolished, the government would have collected RM63.5bil, nearly double the RM35.8bil expected from the Sales and Services Tax (SST) in 2024, demonstrating GST's superior efficiency.
The Ayer Hitam MP also stressed that the rationalisation of the RON95 petrol subsidy must be implemented carefully to avoid burdening the people.
WATCH MORE: https://thestartv.com/c/news
SUBSCRIBE: https://cutt.ly/TheStar
LIKE: https://fb.com/TheStarOnline
Category
🗞
NewsTranscript
00:00Today, we have a keynote address from Mr. Wang.
00:03What is the main culprit in 2024 behind the rising costs and the operational inefficiencies
00:10that places a burden on businesses, particularly our SMEs?
00:15The PINSA, through a petition and various statements, have highlighted that the inefficient tax structure,
00:27especially the sales and service tax SST, poses several challenges for businesses.
00:34The SST has been identified as imposing a tax-on-tax effect,
00:39where businesses tax on inputs that have already been taxed,
00:44leading to a cascading and compounding impact that artificially inflates price for consumers.
00:52This, in turn, reduces consumer purchasing power and adversely affects businesses.
00:59Unlike the GST, the SST appears to lack features like adequate reimbursement for businesses
01:07and real-time electronic filing capabilities, which further complicates operational efficiency.
01:15To make matters worse, this year saw an increase in SST rates from 6% to 8% across various categories
01:25alongside the introduction of new taxes such as the low-value goods tax
01:30with the potential high-value goods tax set to follow.
01:34This combination complicates compliance for businesses and reduces consumer purchasing power,
01:41especially affecting the B40 group.
01:44Insights findings indicate that despite projected collection of RM200 million to RM300 million
01:51from the low-value goods tax, which is 10% on goods valued at RM500 or less imported into Malaysia,
02:00and RM700 million from the potential high-value goods tax,
02:06total collections still far short of average GST values.
02:13If the GST had not been abolished, it would have collected RM63.5 billion
02:21and doubled the projected SST collection of RM35.8 billion in 2034,
02:30an indication of the GST's broader and more efficient tax base compared to the current SST framework.
02:39I think it is about time for us to revisit GST and consider its pre-implementation.
02:47Ladies and gentlemen, this year also sees a bold move with the rationalisation of fuel subsidies.
02:56Subsidies for diesel were lifted for a large number of users early last month
03:03and subsidies for RON95 petrol are expected to be lifted soon.
03:09A big surprise.
03:11The impact on the economy is anticipated to be significant due to larger consumer-based reliance on RON95.
03:21How will the roll-out be managed?
03:25Will there be adequate assistance provided to deserving consumer groups when these subsidies are lifted?
03:33We hope the assistance will be tiered based on individual needs rather than a flat rate figure
03:43similar to the RM200 duly madani rebate for eligible diesel users.
03:51Once the RON95 subsidy is lifted, we can expect spillover effects across various industries.
03:59Despite the assurances by the Authority to limit or prevent price increases,
04:05it is economically inevitable that such spillovers will occur.
04:11This would further diminish consumer purchasing power and make affordability less achievable.
04:18While we understand that subsidies substantially burden government expenditure
04:24and rationalisation is necessary for efficient fiscal management,
04:29it is now the right time to implement fuel subsidy rationalisation
04:33given the rising trajectory of taxes, prices and the overall cost of living in Malaysia.
04:48For more UN videos visit www.un.org