By Ong Kian Ming | 12:17PM Oct 27, 2013
Malaysiakini
MP SPEAKS The Barisan Nasional government is trying to mislead the rakyat by giving the impression that the price of most goods and the taxes paid by the consumer will be reduced after the introduction of the goods and services tax (GST) because it will replace two taxes – the sales tax and the service tax (SST) – which the consumer is currently paying for.
The truth is that the items taxed under the sales tax and the service tax are far less than what is taxed under the GST, which means that the prices of the majority of goods and services will increase because of the GST even after the removal of the SST.
What the BN has not told the rakyat is that many items are currently exempt under the sales tax. According to the Sales Tax (Rates of Tax No 2) 2012, the number of items which are exempt under the sales tax i.e. not taxed, runs to 250 pages. In contrast, the number of items which are zero rated under the GST – not taxed at any point of the supply chain – is only 21 pages long.
Some of the items which are not charged under the sales tax but will be charged under the GST include many non-luxury items such as milk, coffee, tea, mineral water, canned fruit, newspapers, stationary, school bags, and boxes, just to name a few. Electricity consumption above 200kwH (any amount above RM50) will also be charged GST.
The prices of these goods will definitely increase after the GST because the removal of the SST has no effect on their prices.
Currently the sales tax is restricted to certain restaurants and professional services provided by accountants, architects, motor vehicle service and repair centres, telecommunication services, security services, estate agents, parking space services operators and service firms.
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