KUALA LUMPUR — Nov. 10, 2017: Datuk Seri Najib Razak has asked the opposition to not deceive the people on its plan to replace the Goods and Services Tax (GST) with the Sales and Services Tax (SST).
“Abolish the GST and they (the opposition) can state where they will get the RM40 billion a year to cover the shortage of oil revenue. Do not deceive the people,” said the prime minister at his blog (www.najibrazak.com) today.
Najib explained that the SST proposed by the former prime minister Tun Dr. Mahathir Mohamad has overlapping taxation issues as well as multiple counting in product value calculations and leakages due to manipulation by wholesalers and sellers.
He described having the SST as not just backward but that it also has hidden costs that would burden the people.
Najib said Mahathir is aware of the matter and had acknowledged that GST is better than the SST as his own administration had recommended to upgrade the system to the GST.
“Utimately, Tun Mahathir agreed with the government that the GST did cover the shortfall in oil revenue amounting to RM40 billion.
“But as he already had promised to abolish the GST, he now wants to replace it with the SST, an obsolete system that has been repealed by 160 countries. Again, Tun did a u-turn.”
Najib said Mahathir also wanted to make it appear that the opposition would replace the GST with the SST but without mentioning the rate so as to only garner votes.
“Is this not a lie? Under the SST it is not necessary for sellers to declare the amount of tax in the receipt.
“So they can charge tax on different rates without being detected by the enforcement agency, and the people will not realise they are still being taxed even if the GST is abolished. But with the GST sellers must be transparent in stating the total amount, which is six per cent,” explained Najib.
Najib pointed out that the GST was introduced as it is more modern, transparent and has legislation to prevent fraud and is being adopted by 160 countries as well as having internationally recognised means of computation and standards. — Bernama