Customs: SST Will Only Worsen Things

(The Star) – Reverting to the Sales and Service Tax (SST) will only see pricier goods because it is costly to change the system, said the Customs Department.

“Businesses will say they need to retrain people and give 1,001 reasons. It’s not that simple,” said its director-general Datuk T. Subromaniam (pic).

“In fact, businesses will again try to profiteer and we will see another round of inflation due to the change in the system.

“The cost will be passed on to consumers and that translates into higher prices. It will be a double whammy,” he said when contacted.

Subromaniam said the Goods and Services Tax (GST) eliminated double taxation under SST.

“This means that consumers will pay fairer prices for most goods and services compared to SST.

“Under GST, there is greater transparency as consumers will know exactly whether the goods they consume are subject to tax and the amount to pay for.

It also reduces the effect of the black market.

“Who are you trying to protect? Unscrupulous businesses that like to hide and keep a few accounts?” he said. 

Revenue from GST, said Subromaniam, would be used for development and social purposes, such as healthcare and infrastructure.

Last year, about RM41bil was collected from GST.

“GST is also a tax for the future,” he said, “as the entire world is moving towards e-commerce and the digital economy.”

“We are not taxing global players like Google or Netflix. We tax local companies such as iflix.

“Look at Singapore – they will start imposing GST on imported digital services there in 2020.

“It is a huge potential in terms of revenue, so it doesn’t make sense to revert to SST, which was unable to tax a new economy,” he said, adding that his department was looking into this.

“GST has been implemented in more than 160 countries and no one has reverted from it.

Pakatan Harapan unveiled an election manifesto earlier this month stating that GST will be abolished within the first 100 days of its administration.