KUALA LUMPUR, July 19 – Former prime minister Datuk Seri Najib Razak, who introduced the Goods and Services Tax (GST) during his administration, stands firm that the tax system is better than the Sales and Service Tax (SST).
He said it was clear the GST was more transparent, effective and better in terms of social justice. The effectiveness of the returns was also much better than SST.
Najib said this in response to Finance Minister Lim Guan Eng’s admission today that the GST, which Pakatan Harapan strongly opposed to, was more transparent than SST.
However, Lim said the two systems had a different impact on the public, with GST putting greater burden on them.
To this, Najib said: “Good that he is acknowledging it but fact of the matter is, GST is a much more superior tax system employed by more than 170 countries. The tax system will benefit the people in the long run.
“It (SST) will never give you the same returns as GST. In fact, SST will only give you half of the returns GST can.
“There are also much more implications and I will touch on it soon,” he told New Straits Times in Parliament today.
Meanwhile, Rembau Member of Parliament Khairy Jamaluddin said Lim’s contention stated that SST was less of a burden to consumers because it only taxed 38 per cent of goods and services compared to the GST, which affected more than 60 per cent.
He said with Lim’s admission, the government should be looking at retaining GST at a lower rate and increase the list of items on the exclusion rate. “My suggestion here is to retain the GST but put more items in the exclusion list and reduce the tax rate.
“If you do that you would retain a better taxation system. You don’t have to change the system, it is working well and you admitted it was the better,” the former Umno Youth Chief told NST.
Lim’s admission was in response to Pontian MP Datuk Seri Ahmad Maslan’s question in the Dewan Rakyat.
Ahmad had asked which taxation system between the two was more transparent.
“We cannot deny that in terms of transparency and efficiency, the GST trumps the SST. GST allows to collect more tax, but it has an impact on the people.
“While SST is not as efficient, it has less of an impact on the people and that is what we are focused on.” he said.