GST has saved billions lost in Sales and Services Tax

KUALA LUMPUR: Three years after its introduction in April 2015, the Goods and Services Tax has plugged the loss of billions of ringgit through the Sales and Services Tax (SST).

Collections from the GST last year amounted to more than RM40 billion which was returned to the people through various projects including upgrading infrastructure and improving public transportation.

The GST which has been introduced in 167 countries, has been proven to be the best way for a government to expand its economy, and the model used by Malaysia has drawn the interest of the Saudi Arabian government.

According to political analyst Prof Dr Mohd Fuad Mat Jali, the GST collection had benefited the people and used by the government for programmes like the 1Malaysia People’s Shop (KR1M) which offers goods at reasonable prices to reduce the cost of living for the people, as well as providing cheap public facilities like the LRT and MRT.

Fuad who is the dean of the Faculty of Social Sciences and Humanities in Universiti Kebangsaan Malaysia (UKM) said the public now understands that the GST helps the country’s economy and improves the socioeconomic status of the people.

This is because the GST collections go to the same fund as other government taxes such as corporate tax, income tax, duties, income from petroleum and dividends, which the government can include in its annual budget.

The government draws up the budget allocations in detail and the budget is tabled in Parliament each year, and later audited by the Auditor-General.

Mohd Fuad said if there were people who were still unclear about the tax, it could be explained through information sessions or briefings held by government agencies with the cooperation of consumer associations.

“Through these information sessions, many people now understand that there are parties which manipulate the GST issue, especially traders who increase the price of goods, claiming that it was due to the GST. To resolve this, government agencies should beef up enforcement.

“If they are short of staff, recruit unemployed graduates as “Friends of GST” and conduct checks on shopping complexes,” he told Bernama.

Dean of the Faculty of Economics and Business, Universiti Malaysia Sarawak (Unimas) Prof Dr Shazali Abu Mansor said the misunderstanding about the GST was usually caused by traders who take the easy way out by telling consumers that the GST had pushed the price of goods up.

As such, he said, the public must be given clear information on what is causing the price of goods to go up, and why the GST is important, so that the situation is not manipulated further and used as a way to slander the government’s efforts to improve the country’s economy.

He added that there must also be on-going enforcement to ensure that no trader wantonly increased the price of goods.

Meanwhile, deputy president of Pertubuhan Mesra Pengguna Malaysia (PMPM) Azlin Othman said the increase in the price of goods and services was not just because of the GST as there were other factors which influenced and contributed to the increasing cost of living, such as the foreign exchange rate, transport costs as well as other marketing factors.

“The GST is meant to improve the tax system at every level of the supply chain from the producer or supplier to the consumer.

“It is one of the government’s initiatives to reduce the taxes imposed on consumers to just one tax at a rate of six per cent of the overall cost of goods and services which has to be paid by the consumer,” she said.

She said the PMPM constantly worked with the relevant government agencies to channel the correct information to the consumers on the GST.

President of the Consumer Protection Association of Malaysia (PPPM) Datuk Mohd Firdaus Abdullah said although the GST had been proven to help the country’s economy, there were still irresponsible people who confuse the public about it.

“It is a fair and just system because the GST collection are returned to the public, especially the target groups. The association will continue to hold information session to explain this tax system so that consumers understand it and are not easily taken in by irresponsible parties,” he said. - Bernama