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Thursday, 24 May 2018

(NST) SST implementation cannot be delayed


KUALA LUMPUR: The government cannot afford to delay the implementation of Sales and Services Tax (SST) for too long as it will cause the country to lose a huge amount of revenue sources.

Universiti Putra Malaysia senior lecturer of Putra Business School Dr Ahmed Razman Abdul Latiff said for the time being, the country also earned income from crude oil which could offset the effects of shortage of revenues from the Goods and Services Tax (GST).

“Hopefully, the government will not postpone it for more than two months (SST implementation), as it will translate to more uncollected national income for as long as it is delayed,” he told NSTP Group today.

Ahmed Razman said GST collection in 2017 was RM43.8 billion and was expected to grow to RM60 billion in three years, while SST collection was recorded at RM17.2 billion in 2014.

He said while there was a RM20 billion difference between GST and SST collection, it is important to note that GST was introduced when the global crude oil was at below US$50 per barrel level.

"However, crude oil prices reached nearly US$80 per barrel recently, and thus the goverment managed to cope with the shortage of GST revenue," he said.

Last week, the government announced that GST would be zero-rated effective June 1. It is to fulfill the promise of the Pakatan Harapan’s manifesto that it will abolish GST within 100 days, if it won the 14th General Election.

Ahmed Razman said the proposal to replace the GST with SST was seen to be able to reduce prices of daily necessities including food and beverages, only if enforcement was implemented correctly.

Quoting Consumer Price Index (CPI), Ahmed Razman said food prices recorded a significant increase of up to 30 per cent from 2010 to 2017.

"If we look at the people's purchasing power, it is necessary to abolish GST. This is because since its implementation in April 2015, we have seen prices of goods, especially food, rising sharply.

"In my opinion, this action (of abolishing GST), will be able to lower the prices of goods, or at least maintain it at the current level. In addition, enforcement and the correct mechanism need to be put in place so that it does not happen otherwise,” he said.

On a local portal's report that the abolition of the GST gave the big organisations a great deal to run away from tax, he said the Inland Revenue Board (IRB) has complete data to identify individuals or institutions that had to pay their income tax.

"There is no such term as tax evasion. The IRB has all the data. They cannot run away,” he said.