Sarawak federation calls for delay of SST expansion, suggests GST be reintroduced
Datuk Richard Wee
KUCHING (June 13): The Sarawak Federation of Chinese Associations (SFCA) has called on the federal government to delay the implementation of its expanded Sales and Service Tax (SST).
The expanded SST policy is scheduled to take effect on July 1.
SFCA president Datuk Richard Wee suggested a more measured approach should be considered in view of the uncertainty of US President Donald Trump's tariff war against most countries.
'Until the tariff negotiation is finalised between Malaysia and the USA, our government should not burden the rakyat and the business community further.
'Although such expansion of the SST excludes essential goods, the other affected categories will definitely be impacted. And if it is implemented now, there is a possibility that a further adjustment of prices will need to be imposed,' he said when contacted.
Wee said expanding the SST would increase the nation's coffers at the expense of the business community, people, and Malaysian economy.
He suggested the Goods and Services Tax (GST) be reintroduced instead.
'For the longer term, the federal government should reconsider the re-introduction of GST, as GST is a more efficient taxation system and if all major countries have similar system in place, there is no reason why Malaysia could not do the same,' he explained.
Early last year, the Institute of Strategic Analysis and Policy Research (Insap) suggested the federal government should reintroduce the GST in place of SST.
Institute chairperson Datuk Dr Pamela Yong had said this was in view of the government's attempt to boost its revenues with the introduction of the Low Value Goods (LVG) and the still on-hold High Value Goods (HVG) taxes.
'Through our dialogues with the various business associations, GST is still the preferred choice of taxation system due to its transparency and fairness,' she said in a statement.
She pointed out the abolishment of the GST in 2018 resulted in a significant revenue shortfall.
'The GST generated a robust RM44 billion in 2017, contributing significantly to the national coffers. It has been estimated that the GST had it not been abolished it would have collected around RM63.5 billion instead of RM35.8 billion in 2024,' she said.
Insap also stated the SST and LVG disproportionately impact vulnerable groups.
The institute said by focusing on specific goods and services, these measures often place an undue burden on lower-and middle-income groups (B40 and M40) who rely on those goods and services, contradicting the government's stated goal of promoting social equity and inclusive economic growth.
'GST is well-recognised in many advanced countries to have far better outcomes in terms of collection due to its broadband nature,' Yong said, opining it was a grave mistake to have abolished the GST in 2018.
'The priority is to address the people's burden in having to face a downturn in the global economy. This requires stimulus packages and additional fiscal spending, which could have been well supplemented by the GST, had it not been put to an end by Pakatan Harapan 1.0.
'It is time for Malaysia to put political expediency in the back seat, swallow our pride, and re-instate the GST for the sake of the people,' she stated. GST lead Richard Wee Sarawak Federation of Chinese Associations SST
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