Lim: SST will ease people’s burden
‘Govt will earn less revenue but people come first’
PUTRAJAYA: The reintroduction of the Sales and Service Tax (SST) to replace the Goods and Services Tax (GST) is meant to ease the people’s burden, says Lim Guan Eng.
The Finance Minister said although it would mean less revenue for the government, it was more important that the people’s welfare was taken care of.
“When the government made the decision to replace the GST with the SST, it is because we have the people’s well-being as a priority.
“We put the people’s well-being before collecting higher revenue from taxes. In other words, ensuring that the people are less burdened is more important than collecting more tax revenue,” he said.
Speaking at a media briefing on SST, Lim said many people would dislike his statement as the decision would put pressure on the government’s fiscal position.
“But as I have said before, what is the point of having nice-looking figures if the people are suffering?” said Lim.
The SST comes into effect tomorrow, following the repeal of the GST Act earlier this month.
In the new system, the government will impose a tax of 5% to 10% on the sale of goods and 6% tax on services.
Under the GST regime, a total of 11,197 goods were imposed a 6% GST.
In comparison, only 5,612 goods will be subject to a 10% sales tax. while 793 items will be hit with 5% sales tax, according to a statement.
Therefore, the government will collect only RM21bil annually under the SST, compared to RM44bil which could have been collected from the GST.
Lim said the list of items that were exempted from the SST would continue to expand as the government engages with more business owners to get feedback.
“As of now, there are 5,443 items that are exempted and we expect this number to increase.
“We admit that this list is not perfect, so we will have dialogue sessions with stakeholders and listen to their suggestions,” said Lim.
He said following a meeting with owners of coffee shops and nasi kandar restaurants, the government agreed to increase the SST threshold for eateries from RM500,000 to RM1.5mil.
“We hope this move will prevent an increase in prices at eateries,” he said.
Also present at the media briefing were Customs Department director-general Datuk Seri Subromaniam Tholasy and Domestic Trade and Consumer Affairs Ministry enforcement director Datuk Roslan Mahayudin.