Ismail Sabri moots bringing back GST to boost govt coffers

KUALA LUMPUR, Oct 24 — Bera MP Datuk Seri Ismail Sabri Yaakob today reiterated his call for the return of the Goods and Services Tax (GST) as a means to increase government revenue.

The former prime minister insisted that the consumption tax had proven to be more efficient, transparent and fairer than the Sales and Service Tax (SST) currently being used.

“When GST was abolished the country lost between RM20 billion to RM30 billion a year as a result of the ‘black economy’ because we could not monitor those who did not pay taxes.

“The SST increase of 2 per cent is also only giving an additional revenue of RM3 billion to the country. Even audit firm Deloitte predicted that with the 2 per cent increase in SST it can only add RM900 million to revenue.

“Is this worth the consequences that the people will face?” Ismail Sabri said while debating the Supply Bill 2024 in Parliament.

The Umno backbencher had earlier expressed his disagreement with the Anwar administration’s move to raise the SST from 6 per cent to 8 per cent.

Ismail Sabri said the step was a less accurate step compared to other more efficient taxation systems.

“Although this increase does not involve food and drinks, it should be understood that this increase will lead to a chain effect of price increase on basic goods.

“This is because business owners will not absorb the tax increase and their production cost,” he said.

In his Budget 2024 speech on October 13, Prime Minister Datuk Seri Anwar Ibrahim said the government will expand service tax to cover logistics, brokerage, underwriting and karaoke.

This means the service tax rate will increase to 8 per cent.

But Anwar who is also finance minister said the service tax for certain sectors like food and beverages, telecommunications, parking and logistics, will be kept at the current rate of 6 per cent.