Dr Wee: Review expanded SST

The Star

4 hours ago

PETALING JAYA: Apart from a longer list of goods taxable under the expanded Sales and Services Tax (SST), another major concern of the people is the tax on raw materials and machinery, says Datuk Seri Dr Wee Ka Siong (pic).
The MCA president said this will then set off a wave of price increases down the line, causing more pressure on the people.
'The SST brings a cascading effect because the raw materials and machinery will also be taxed after this.
'This silent inflation wave will surely be felt by all levels of society throughout the coming months,' said the Ayer Hitam MP in a Facebook video yesterday.
He pointed out that back in 2018, more than 8,000 items were exempted from the SST.
Under the expanded tax scheme set to take effect on July 1, the list has been significantly shrunk to only around 1,000 items, he said.
He added that the expanded SST will not only apply to wellness and beauty-related services, it will also be applied to traditional products such as red dates, black fungus, dried longan and snow fungus.
He stressed that many industries including rubber, plastics, medicine and oil palm, and the manufacturing sector have voiced their concerns about the expanded scheme as about 97% of goods in the market will be taxed.
'While we welcome the government's U-turn on the tax for imported fruits, it is not enough.
'The real issue and danger lies in the taxation of raw materials and industrial machinery,' he said.
'Politics aside, the people's welfare should be prioritised. It is better for the government to review the scheme or scrap it altogether,' he said, adding that the SST rate had already increased (from 6% to 8%) on March 1, last year.
Dr Wee added that it was unfortunate that the expanded SST will start on July 1, the same day that the base electricity tariff and Port Klang tariffs are set to increase.
'The obvious solution for the government is still the GST, which is a fairer and more transparent taxation system.
'The main difference between both systems is that the GST taxes the end user – you use more, you pay more – while the SST taxes all levels of the supply chain and the end user has to pay a far higher price in the end,' he said.
'The GST ensures the stability and strength of the country while the SST will further burden the people and give businesses an excuse to raise prices,' he stressed.
In announcing the expanded SST, the Finance Ministry said the measure is to strengthen the country's fiscal position by increasing revenue and broadening the tax base.