Replacing GST won’t be a good move, says Eswaran

PETALING JAYA: Bringing back the Sales and Services Tax (SST) to replace the Goods and Services Tax (GST) will impact businesses negatively, said Tan Sri Kenneth Eswaran.

The Malaysian Associated Indian Chambers of Commerce and Industry president also said GST is better and more effective, in view of SST’s weaknesses in the areas of compounding effects, transfer pricing and value shifting.

Last week, Pakatan Harapan chairman Tun Dr Mahathir Mohamad proposed that SST replace the GST if the Opposition coalition takes over the Federal Government after the next general election.

He had said that removing GST without replacing it with an alternative source of revenue would be “very bad” for the Pakatan Harapan government.

Eswaran pointed out that the GST has many benefits.

It is administered in a fully computerised environment, helping to speed up processes such as refund claims, he said in a statement yesterday.

Also, he said, GST is “levied fairly”, in that more people paid tax instead of just those who were paying income tax.

“All the benefits provided by the implementation of GST help stimulate economic growth and boost the nation’s competitiveness in the global market,” he said.

Eswaran described Dr Mahathir’s proposal as premature, saying that replacing the GST would involve a decision by all the Pakatan parties, not just Parti Pribumi Bersatu Malaysia that is helmed by the former prime minister.