SHAH ALAM – The government should assess the impact on consumers, businesses and the economy as a whole before making any changes to the country’s tax system, including the possibility of integrating elements of the Sales and Service Tax (SST) with the Goods and Services Tax (GST).
Bumiputera Retailers Organisation (BRO) president Datuk Syed Naqiz Shahabuddin Syed Abdul Jabbar said the GST or SST debate should not be viewed solely from the perspective of which tax system was better, but should also take into account its impact on the retail sector and people’s cost of living.
He said the tax system implemented needed to be clear, transparent and easy to comply with, while avoiding excessive increases in the cost of doing business, particularly for micro, small and medium enterprises (MSMEs) and Bumiputera retailers.
“SST has the advantage of being more targeted. However, as the scope of SST is expanded, we need to assess whether there will be an increase in costs throughout the supply chain, which will ultimately have to be borne by retailers and consumers.
“GST, meanwhile, has a broader tax base and a more systematic input tax credit mechanism, which can reduce the issue of double taxation or cascading tax,” he told Sinar.
Syed Naqiz said if GST was reconsidered, the government needed to take into account the current cost-of-living situation faced by the people.
He said any changes to the tax system also needed to be implemented cautiously through comprehensive engagement with industry players.
“If GST is to be reintroduced, we believe the rate should start at a low level, while essential goods and services for the people should be given appropriate protection.
“At the same time, the government needs to ensure that the tax refund mechanism for businesses is fast and efficient so that it does not affect companies’ cash flow,” he said.
Meanwhile, Syed Naqiz said policy stability and certainty were crucial to the retail sector as every change to the tax system required businesses to bear additional costs.
He said these costs included adjustments to point-of-sale (POS) systems, accounting, price changes, staff training and compliance processes.
“Therefore, our position is not simply about choosing GST or SST.
“What is more important is for Malaysia to have a tax system that is fair to the people, business-friendly and capable of supporting the country’s long-term economic growth,” he said.