GST and SST, passing the buck ... vice-versa

SHAH ALAM: Slightly over a month after the Goods and Services Tax was zero-rated, participants at a forum here heard that GST is still the more efficient form of tax collection than the Sales and Services Tax that is making a comeback in September.

The new Pakatan Harapan go­­vernment should not be apologetic and instead, admit it if the GST policy works best for the nation, said speakers at the “A Month After GST” forum by Sinar Harian.

“If the Government goes through with the SST, the prices of goods will definitely go up no matter what the rate is as businesses will find a way to pass the cost back to the consu­mers.

“Government enforcement agencies have not been able to effectively control businesses from doing this,” said forum moderator Perbadanan Kota Buku CEO Sayed Munawar Sayed Mohd Mustar yesterday.

The 6% GST, which replaced the SST in April 2015 under the Barisan Nasional government, was zero-rated by the Pakatan government on June 1 to realise one of the election pledges made by the coalition.

Panellist and the Malay Economic Action Council (MTEM) CEO Ahmad Yazid Othman said it was not the time for the Government to be popu­lar but rather, to be right.

“If they study it and feel that the GST is the best policy, then they should go ahead and cancel its removal,” said Ahmad Yazid.

He also said the “tax holiday” between June and August before the SST is re-introduced is a creative way for the new government to analyse the real market prices of goods before taxes.

“This grace period is to allow for the feel-good factor and to analyse the real prices of goods,” he added.

Forum panellist and Mydin managing director Datuk Ameer Ali Mydin said that while GST is the more efficient method of tax collection, Pakatan could come up with a lower rate of SST and plug leakages in order to save money.

“It could fix the SST rate at 3% across all sectors to ease administrative purposes.

“When the rate is low, the compliance will be high. The rate should be either 3% or 4%, not more,” he opined.

He also said the Government would not need the RM50bil collection from GST and could instead make do with a lower collection from the SST if it could stop leakages in its administration.

Pakatan, however, must do away with the subsidy mentality, whereby subsidies are given to stem the rising prices of goods.

Muslim Consumers Association of Malaysia (PPIM) chief activist Datuk Nadzim Johan said with the SST, businesses will justify the price increase as coming from the tax so the Government must play its role in enforcement.