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Ismail Sabri Yaakob, the Member of Parliament for Bera, has reiterated his call for the reinstatement of the Goods and Services Tax (GST) as a strategy to augment government revenue. The former prime minister maintained that GST, known for its efficiency, transparency, and fairness, outshines the current Sales and Service Tax (SST) in use. Speaking during the debate on the Supply Bill 2024 in Parliament, Ismail Sabri emphasized that the abolition of GST resulted in a significant annual revenue loss of between RM20 billion to RM30 billion, primarily due to difficulties in monitoring tax evasion within the ‘black economy.’
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Ismail Sabri further critiqued the 2 percent increase in SST, which he argued only contributes an additional RM3 billion in revenue for the country. He pointed to Deloitte’s prediction that this increase would generate a mere RM900 million, raising questions about whether it justifies the consequences borne by the public.
Expressing his opposition to the Anwar administration’s decision to raise the SST from 6 percent to 8 percent, Ismail Sabri contended that this step is less precise compared to more efficient taxation systems. He highlighted the cascading effect of this increase on the prices of basic goods, emphasizing that businesses are unlikely to absorb the tax hike, which, in turn, affects production costs.
In his Budget 2024 speech on October 13, Prime Minister Datuk Seri Anwar Ibrahim announced the expansion of service tax to encompass logistics, brokerage, underwriting, and karaoke, leading to an increase in the service tax rate to 8 percent. However, Anwar, who also serves as the finance minister, indicated that the service tax for specific sectors like food and beverages, telecommunications, parking, and logistics would remain at the current rate of 6 percent.