KUALA LUMPUR (July 19): Putrajaya has conceded that the sales and services tax (SST) system is not as transparent as the goods and services tax (GST), but stressed that the former is able to reduce Malaysian consumption tax by half.

In his parliamentary response to Ayer Hitam member of Parliament Datuk Seri Wee Ka Siong today, Finance Minister Lim Guan Eng said the government is not going to deny the fact that SST is going to have an impact on prices, but the impact will be relatively less significant than GST.

"We understand that GST is more transparent and efficient, but it is because of that the tax collection spans a wide range of aspect, that is why SST is estimated to collect about half of what GST would collect annually, so there will be impact, but what we are concerned [about] is the impact towards the end user, and SST would have [less] impact to them," he said.

Lim also mentioned that the multi-layer imposition of GST along supply chains and the authorities being slow in refunding claimable GST has resulted in price increase during the previous regime.