KUALA LUMPUR: The government should retain the existing Sales and Service Tax (SST) system and improve it where necessary instead of reinstating the Goods and Services Tax (GST), Bangi member of parliament Syahredzan Johan said.
He said Prime Minister Datuk Seri Anwar Ibrahim had expressed his willingness during the 2027 Budget engagement session on Aug 18 to incorporate the positive elements of the GST into the existing SST system, including measures to prevent the cascading effect.
"Many parties voiced their support for the GST to be reinstated.
"However, the government should not revert to the GST at this time," he said.
Syahredzan said reintroducing the GST would require more than 900,000 businesses to register and collect the tax, compared with about 132,000 under the current SST system.
"This would certainly mean that the GST would involve far more businesses than the SST," he said when debating the 2027 Budget in the Dewan Rakyat today.
He added that more Sales Tax tariff lines were subject to a zero per cent rate under the SST than under the GST, while more services were taxed under the GST than under the SST.
Syahredzan also said the GST would burden small businesses, which would have to manage tax refunds and other related administrative matters.
Addressing arguments that the GST offered greater transparency, he said the e-invoicing system currently being implemented also aimed to improve transparency.
"However, by exempting micro, small and medium enterprises (MSMEs) with sales below RM3 million from e-invoicing, we have achieved a balance between the need for transparency and avoiding placing a burden on MSMEs," he said.
He said the GST also imposed tax directly on consumers, whereas the tax pass-through mechanism under the current SST system did not impose the tax directly on them.
"Businesses that bear SST on their inputs may indeed be more inclined to prefer the GST, but consumers would bear a heavier impact if the GST were implemented," he said.
Syahredzan said the Madani government had chosen not to reintroduce the GST because it did not want to burden the people.
"We cannot keep changing our tax system every few years. First, we had the SST, then the GST, then the SST again and then the GST once more. We need policy certainty.
"Under the current circumstances, where the people's cost of living is rising, reintroducing the GST would add to the burden on more people.
"As such, the government does not need to revert to the GST. It should continue with the existing system and improve it if necessary," he said.
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