KUALA LUMPUR: Datuk Seri Ismail Sabri Yaakob proposes the reinstatement of the goods and services tax (GST) to boost Malaysia’s revenue. Ismail Sabri, the former prime minister, believes that the GST is a more effective, transparent, and fair tax system compared to the current sales and service tax (SST). According to him, increasing the SST from 6% to 8% is not the right move and will result in a price increase for goods.
During the debate on Budget 2024 in Parliament, Ismail Sabri said that Malaysia suffered annual losses of RM20 billion to RM30 billion due to the “black economy” following the abolition of the GST in 2018. He claimed that increasing the SST by 2% would only generate an additional revenue of RM3 billion, while international audit firm Deloitte estimated it to be around RM900 million. Ismail Sabri questioned whether the benefits outweigh the impact on the people.
Prime Minister Datuk Seri Anwar Ibrahim announced the plan to raise the service tax from 6% to 8% in Budget 2024, excluding food, beverages, and telecommunications. However, Ismail Sabri expressed concerns over the readiness of the Central Database System (Padu) that will be used to determine subsidy eligibility. He questioned whether the system has been tested and raised doubts about the criteria for determining eligibility for targeted petrol subsidies.
Ismail Sabri also highlighted the issue of subsidies and mentioned how subsidies for chicken and eggs were expanded during his tenure as the prime minister. He raised concerns over the potential increase in chicken prices and the difficulty of controlling costs due to factors such as imported chicken feed, logistics, labor, utilities, and medication.
Addressing the issue of cartels, Ismail Sabri stated that five companies were implicated in determining the price of chicken feed. He questioned the delay in the Malaysia Competition Commission’s (MyCC) verdict following investigations into the matter. Additionally, he expressed shock at the rice supply issues in the market, despite having sufficient stockpiles that could last up to six months.
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