SST revision won't hurt govt's RM10bil collection target, says economist
On Friday, the government announced that imported apples, oranges, mandarin oranges and dates will be exempted from the SST. (Envato Elements pic)
PETALING JAYA : The revision of the sales and service tax's (SST) expansion to exempt several goods and services will not jeopardise the government's target of collecting up to RM10 billion a year, says an economist.
Geoffrey Williams said the government has been responsive to views from the relevant stakeholders, and is committed to reducing financial burdens without harming the country's fiscal capability.
Geoffrey Williams.
'The revision is minor and will not greatly affect overall collections.
'The government should still be able to hit its RM5 billion collection target for the last six months of 2025 and RM10 billion for next year,' he told FMT, adding the revision will also help control inflation and consumer spending patterns.
On Friday, the government announced that imported apples, oranges, mandarin oranges and dates will be exempted from the SST. Also exempted are beauty services such as manicures, pedicures, facials and hairdressing.
The finance ministry also said the threshold for service tax registration for leasing or rental and financial services had been raised from RM500,000 to RM1 million, to reduce the number of small businesses that would be affected.
Williams said the revision is in line with the government's long-term goal to increase national revenue and strengthen basic health, education and social protection services without unduly burdening consumers.
'This is not just a question of tax collection, but of responsible and fair fiscal policy implementation,' he said.
Carmelo Ferlito.
However, Center for Market Education CEO Carmelo Ferlito said the government must address potential weaknesses and leakages arising from confusion over the tax's implementation, especially in relation to the newly-exempted goods and services.
He said the tax must be simple and fair, warning that making it overly complex would only cause more problems.
Ferlito also called for the government to control its own spending to avoid the inflationary risks associated with SST.
'Taxes do not cause inflation, government spending does.
'If the government is truly serious about implementing reforms to reduce the burden of the cost of living on the people, it must impose limits on its own expenditure,' he said.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
New Straits Times
3 hours ago
- New Straits Times
Anwar set for maiden three-day visit to Italy to boost ties
KUALA LUMPUR: Prime Minister Datuk Seri Anwar Ibrahim is scheduled to undertake a three-day working visit to Italy, his first to the country, according to a statement from Wisma Putra. The statement said that the visit, from July 1 to 3, is at the invitation of his counterpart, Giorgia Meloni. He will be accompanied by Foreign Minister Datuk Seri Mohamad Hasan, Transport Minister Anthony Loke Siew Fook, Agriculture and Food Security Minister Datuk Seri Mohamad Sabu, Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz, and Defence Minister Datuk Seri Mohamed Khaled Nordin. According to Wisma Putra, during the visit, the Prime Minister is slated to hold a bilateral meeting with Meloni at the Chigi Palace in Rome on July 3. "This meeting provides an opportunity for both leaders to assess the progress of Malaysia-Italy relations and explore new cooperation opportunities, especially in the fields of economy, defence technology, and energy," the statement read. Asean and Global Outlook Both parties will also exchange views on regional and international issues of mutual interest, including the Asean-Italy Development Partner Relations, Asean-European Union Dialogue Relations, and the situation in the Middle East. "The Prime Minister will also outline Malaysia's priorities during its Asean Chairmanship in 2025 and Asean's efforts in addressing regional and global challenges," it added. Wisma Putra informed that the Prime Minister is also scheduled to officiate the "Malaysia-Italy Economic Partnership Roundtable," which will be attended by Malaysian and Italian industry leaders to discuss cooperation opportunities in bilateral investment and trade on July 2. Additionally, Anwar is slated to attend a meeting with Muslim community leaders in Italy and a get-together with the Malaysian diaspora. The long-standing bilateral relationship between Malaysia and Italy is strong and mutually beneficial, supported by continuous growth in trade and investment, as well as people-to-people connectivity. Last year, total trade between Malaysia and Italy recorded a two per cent increase to RM14.61 billion (US$3.18 billion) compared to 2023. For the period of January to May this year, total trade continued to show positive performance with a 3.3 per cent increase to RM6.50 billion (US$1.48 billion) compared to the same period in 2024. Italy is Malaysia's fifth-largest trading partner among European Union countries and the third-largest importer of Malaysian palm oil from the bloc for 2024.
Free Malaysia Today
3 hours ago
- Free Malaysia Today
Iran-Israel conflict could see Malaysians pay more for groceries
Food prices in Malaysia could go up by 10% if global oil prices hit US$110, says Barjoyai Bardai. PETALING JAYA : Malaysians could end up paying more for groceries if tensions in the Middle East continue to escalate, economists have warned. Malaysia University of Science and Technology's Barjoyai Bardai, Putra Business School's Ahmed Razman Abdul Latiff, and Sunway University's Yeah Kim Leng say Malaysians will start feeling the pinch if the conflict between Israel and Iran were to push oil prices to US$120 per barrel. Such a surge would trigger a hike in transportation and food costs, they say. Global benchmark Brent crude futures closed at $72.34 a barrel on Friday, up some 3.6% in the week Barjoyai Bardai. 'Even if global oil prices hit US$110, food prices in Malaysia could go up by 10%,' Barjoyai told FMT. He said although Malaysia is a net oil exporter, it will still be vulnerable to supply chain disruptions, especially if Iran moves to block the Strait of Hormuz which is a critical passage for global oil shipments. 'Logistics costs will go up, supply will be limited, and prices will rise.' On Thursday, CNBC reported that crude oil futures rose more than 1% after Israeli prime minister Benjamin Netanyahu ordered the country's military to intensify attacks against Iran. On the same day, Prime Minister Anwar Ibrahim gave an assurance that the government will not raise the price of RON95 petrol, even if global crude oil prices were to increase sharply due to geopolitical tensions in the Middle East. Barjoyai praised the government's decision to maintain its current fuel subsidy structure, and its commitment to putting in place the targeted RON95 subsidy plan. However, he said, its implementation may have to be deferred. 'If oil prices go up, government expenditure will go up. Cost of goods will follow as businesses will factor in the higher transport costs,' he said. Ahmed Razman Abdul Latiff. Razman said high oil prices would benefit national oil company Petronas and boost the country's coffers. However, this would see an escalation in the government's expenditure to maintain the fuel subsidy. 'Fuel prices affect every industry. Operating costs will rise, and most businesses will pass that on to consumers. 'Energy drives everything from transportation to food and housing. Malaysians should prepare for a tighter second half of the year,' he said, adding that even if inflation stays under 3%, the B40 and M40 groups will feel the squeeze. Yeah Kim Leng. Yeah said Malaysia, as a net oil exporter, stands to benefit from higher oil prices. 'If oil prices go up, the increased revenue from Petronas could help offset the subsidy burden. But government expenditure will be higher than revenue,' he said. He said a similar scenario was experienced in 2022, when oil hit around US$100. 'Our subsidy bill nearly tripled from RM20 billion to RM30 billion to triple the amount. If oil hits US$120, we could see a repeat,' he said. Yeah also warned that attacks on oil infrastructure and facilities, particularly involving Iran and Israel, could trigger a global shortage. 'If the Middle Eastern producers reduce output or if shipping routes in the Persian Gulf are disrupted, we're looking at major supply shocks. Oil could easily shoot past US$100 a barrel,' he said. He said such a scenario would have broad inflationary effects and could see consumers tightening their belts which could cause the economy to slow down.
Free Malaysia Today
3 hours ago
- Free Malaysia Today
No digging, rare earth mining will be environmentally friendly, says Perak MB
Perak menteri besar Saarani Mohamad said all rare earth mining activities will comply with SOPs. (Bernama pic) LENGGONG : The Perak government has given an assurance that all mining activities involving non-radioactive rare earth elements (NR-REE) will not harm the environment. Menteri besar Saarani Mohamad said although rare earth mining presents a new opportunity for generating state revenue, the government will not compromise on protecting the people's interests. He said the state government guarantees that NR-REE activities will utilise modern mining technologies to improve efficiency and safety while safeguarding the environment. 'When we initiated the NR-REE mining pilot project in Kenering, Hulu Perak, one of the key requirements was strict compliance with environmental impact assessment procedures, particularly those concerning environmental protection,' he said at a press conference after presenting the progress report of the Perak Sejahtera 2030 plan here today. 'The latest extraction method for this mineral no longer involves digging, but uses the in-situ leaching (ISL) method, which involves injecting ammonium sulfate solution into the ground to dissolve the rare earth elements, which are then pumped back to the surface for processing.' Saarani said the state government would not allow NR-REE mining activities if it does not comply with standard operating procedures and the requirements set by the relevant technical agencies. 'NR-REE mining using the ISL method is the latest sustainable approach with controlled environmental impact, low operational costs, and good worker safety standards,' he said. 'Therefore, we do not have to worry about landslides, there will be no clearing of trees, and the forest reserve itself will be protected. If it causes environmental damage, we will not allow it.' It was previously reported that the state government had identified new potential NR-REE mineral sites in three additional districts apart from Hulu Perak, with estimated reserves of 1.7 million metric tonnes. Saarani said based on preliminary studies by the Perak minerals and geoscience department, the districts include Kuala Kangsar, Kinta, Larut Matang and Selama, with 70% to 80% of the potential NR-REE reserves located within forest reserve areas.
