Move to increase SST rate inaccurate – Ismail Sabri

KUALA LUMPUR – The government's decision to increase the Sales and Service Tax (SST) rates in the 2024 Budget has caught the attention of the former Prime Minister, Datuk Seri Ismail Sabri Yaakob.

The Bera MP said that the decision to increase the SST rate by two per cent was seen as inappropriate.

"Although this increase does not involve food and beverages, it should be understood that it will have a chain effect on all aspects, contributing to an increase in the prices of essential goods.

“This is because businesses will not absorb the tax increase and their production costs will rise.

“Therefore, I once again maintain my opinion that it is time for the government to reintroduce the Goods and Services Tax (GST), which was abolished in 2018 by the Pakatan Harapan (PH) government," he said while debating the 2024 Budget Bill in the Dewan Rakyat on Tuesday.

Previously, Prime Minister Datuk Seri Anwar Ibrahim, in the presentation of the 2024 Budget last week, announced the government's intention to raise the service tax rate to eight percent, excluding services such as food and beverages as well as telecommunications.

Ismail Sabri also said that the GST had proven to be far more efficient, transparent, and fair compared to the SST.

"When the GST was abolished, the country lost approximately RM20 billion to RM30 billion annually due to the 'black economy' because we couldn't monitor those who didn't pay taxes.

The two per cent increase in SST would only generate an additional RM3 billion for the country.

In fact, the international auditing firm Deloitte predicted that a two per cent SST increase would only be able to increase revenue by about RM900 million.

“Is this worth the impact that will be faced by the rakyat?" he asked.