Friday 29 Mar 2024
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KUALA LUMPUR (May 18): The Council of Eminent Persons, which was tasked to advise the new Pakatan Harapan government on policy-making, expects the sales and services tax (SST) to be implemented “very soon”.

Council chairman Tun Daim Zainuddin said that while there are certain details to be ironed out, the government can prepare itself to implement the recycled tax system in two to three months.

However, the rates for the tax has not been established, he said.

“That, you have to ask the Ministry of Finance. I am not the Finance Minister,” Daim said, but expects the new tax to be able to generate around RM30 billion for the government.

The new Pakatan government, which took over Putrajaya from Barisan Nasional after the May 9 general election, will zero-rate the goods and services tax (GST) beginning June 1 as part of its election promises.

The previous government had replaced the SST with GST in 2015, partly to gain additional revenue to make up for the shortfall in oil revenue following the massive drop in crude oil prices at the time.

Pakatan, has vouched to reverse the process, arguing the “blanket” tax GST — which collected over RM40 billion annually — contributed to higher cost of living for the middle- and low-income populace.

In a related matter, Daim said the council will meet with national oil firm Petronas next week to discuss the process of re-introducing fuel subsidy, as outlined in Pakatan’s manifesto.

When asked about the implication of new government policies such as eliminating GST and re-introducing subsidies towards sovereign credit rating, Daim said: “In the US, rating agencies gave high ratings to sub-prime mortgages. They downgraded us during the 1990s recession... I am not very concerned about the rating agencies.”

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