KUALA LUMPUR (July 24): The government is projecting sales and service tax (SST) collection will amount to RM22 billion for year 2019, said Deputy Finance Minister Datuk Ir. Amiruddin Hamzah.
He said the reintroduction of the SST tax system to replace the goods and services tax (GST) had greatly helped raise disposable income of the people.
"In general the reintroduction of SST did not result in an increase in the price of goods and services. For example the Consumer Price Index (CPI) did not show any significant increase," he said during oral question-answer session at the Dewan Negara today.
He was replying to a question from Senator Datuk Donald Peter Mojuntin who wanted to know the amount of revenue expected under the SST tax system and whether the tax system was effective in reducing cost of living.
Amiruddin added that the coverage and scope of tax imposed under SST was very much smaller as compared to the GST system, as various types of consumer goods and basic necessities such as food items were not subject to sales tax.
On the service tax, he said tax was only imposed on selected services.
In response to Mojuntin's supplementary question on how the government would address the shortfall of over RM20 billion as RM44 billion was collected under the GST system, Amiruddin while admitting the short fall said the government would work on making up for the revenue shortfall.
"The government is optimistic that if the economy is well managed, investors will be convinced and this will encourage them to invest thus creating more business opportunities which will help raise tax collection,” he added.