Revenue from sales and service tax to exceed that collected from GST in years to come: Malaysia PM Mahathir
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The GST was originally introduced in April 2015 at a rate of 6 per cent. It was replaced by the SST on Sept 1, 2018.
PHOTO: LIANHE ZAOBAO
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KUALA LUMPUR (THE STAR/ASIA NEWS NETWORK) - Revenue collected from the sales and service tax (SST) is expected to exceed the amount collected under the goods and services tax (GST), said Malaysian Prime Minister Mahathir Mohamad on Tuesday (Oct 8).
"Of course there is a shortfall in collection under the SST but this is not because the SST is a mistake. This is because when a new tax is introduced, there will be a shortfall due to adjustments made by the officers and taxpayers," he said.
Tun Dr Mahathir added that he is confident that the revenue collected through the SST would surpass the amount previously collected under the GST in the years to come.
He said this when replying to a supplementary question from lawmaker Ismail Mohamed Said in Parliament on Tuesday.
Datuk Seri Ismail wanted to know how the government would make up for the RM22 billion (S$7.2 billion) shortfall in tax revenue after the SST was reintroduced to replace the GST in 2018.
To a supplementary question raised by Kangar MP Noor Amin Ahmad, Dr Mahathir said the government decided to reintroduce the SST as there was double taxation when GST was imposed.
"This resulted in the people and traders being unhappy with it, compared to the SST which had long been in use without any problems. That is why we reintroduced the SST and I am confident that if managed well, we will get higher returns compared to the GST," he said.
In reply to another lawmaker Ma'mun Sulaiman, Dr Mahathir said the government is looking at ways to improve on the SST and added that there are no plans to return to the GST.
"The SST is going on well and we just need to improve its implementation. That is why there is no reason to return to the GST which was rejected by the people," he added.
Dr Mahathir said that repeated changes in the taxation system was not good for the government's image and would affect investor confidence.
Last Wednesday, the Malaysian Institute of Economic Research (MIER) suggested that the government reintroduce GST at a lower rate of 3 per cent.
The GST was originally introduced in April 2015 at a rate of 6 per cent. It was replaced by the SST on Sept 1, 2018.
Responding to the suggestion from MIER, Dr Mahathir had said last Thursday that the government would consider reintroducing the GST if the people believed it to be better than the SST.
However, the Prime Minister has since clarified that there are no plans to return to the GST scheme.
