KUALA LUMPUR, July 3 — The expansion of the scope of the Sales and Service Tax (SST) can control the cascading effect on all goods because it is implemented in a targeted manner and not comprehensively, which will burden the people, said Finance Minister II Datuk Seri Amir Hamzah Azizan.
He said the expansion of the scope of SST only applies to some goods and not to most basic daily necessities of the people.
“We can control the cascading effect in what we expand in the SST, like in March last year when we expanded (the SST rate from 6 per cent to 8 per cent) we also had a bubble system and there was no effect.
“If you don’t believe me, look at the inflation figures. Is the inflation in Malaysia at a very high level? No. Last year it was 2 per cent so it was manageable and under control,” he said on the Keluar Sekejap podcast hosted by Khairy Jamaluddin and Shahril Hamdan.
According to Amir Hamzah, the government has assessed the need to reduce the burden on the right segments by choosing to expand the scope of SST to only certain goods.
“Because we can choose… Who says choosing is wrong? If we choose the right segment and it reaches the right target, then what we are doing is a better way.
“The understanding is that our implementation is targeted, and not across the board which will burden the people and we also need to see what the government does with the results obtained,” he said.
Amir Hamzah explained that among the positive impacts that can be seen through the government’s efforts is increasing the number of recipients of the Sumbangan Asas Rahmah from 700,000 people to 5.4 million.
“They get assistance of between RM50 and RM200 a month to buy basic goods. That is the support the government can provide when it has the revenue,” he said.
Meanwhile, commenting on the issue of the upcoming RON95 subsidy rationalisation, Amir Hamzah said the government is still at the discussion stage in assessing the appropriate mechanism including the use of the Central Database Hub system to set the threshold value.
“There is a possibility that we will start with a high cut line because we think that for now, this is the only level we can set.
“This will be discussed in the Cabinet where the cut line is reasonable. We think before the end of this year, we will roll out (the subsidy rationalisation of) RON95,” he said.
— Bernama
