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Mahathir: SST collection will surpass GST in coming years (Updated)

08 Oct 2019 / 11:46 H.

KUALA LUMPUR: Tun Dr Mahathir Mohamad is confident that collection the from Sales and Services Tax (SST) will surpass that of the now-abolished Goods and Services Tax (GST) in the next few years.

The Prime Minister acknowledged that there is expected to be a shortfall of over RM20 billion this year under the current tax regime, as compared to the RM44 billion annual collection under GST, but said this was usual for any new taxes that were introduced.

“It is true, when any new taxes are implemented, collection from that tax will experience some shortfall in the beginning. This is due to adjustments that needed to be made.

“But I’m confident in the coming years, collection from SST will be higher than GST,” he told the Dewan Rakyat, here today.

Mahathir was responding to questions from Datuk Seri Ismail Mohamed Said (BN-Kuala Krau) on the expected shortfall under SST and if the government has policies and plans in place to cover the shortfall.

The premier’s statement comes amidst growing calls from economists and the opposition for the GST to be reintroduced if the government intends to increase its coffers.

They pointed out that the unpopular GST managed to collect RM44 billion each year, which Deputy Finance Minister Datuk Amiruddin Hamzah had, in July, said was projected to collect RM22 billion for 2019.

Commenting further, Mahathir said collection from GST was also higher because it is charged on multiple levels of transaction, and said this has caused uneasiness among both consumers and businesses.

“In comparison, SST has been implemented for so many years (before GST was introduced in 2015) and there were never any problems. That was why we decided to revert back to SST.

“In addition, we found that refunds for GST input tax credit were made so much later, and this has subsequently increased the cost of making business,” he said, adding that traders were also forced to undergo training and update their payment system, which required added costs.

Mahathir also said the government does not intend to reintroduce GST at the moment as frequent changes to the tax system would reduce confidence among investors.

“This will give a bad image to the country. So for now, the government is in the process of improving further our SST system,” he said.

On the offer made by Datuk Seri Ahmad Maslan (BN-Pontian) on Monday for free GST consultation should the government revert to GST, Mahathir jokingly said: “Thank you for the offer, but the government will be destroyed if we accept you as consultant.”

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