The unpopular Goods aand Services Tax (GST) Bill was passed in the Dewan Negara yesterday after being debated by 31 senators.
The GST, to be introduced on April next year, is part of the government’s exercise in streamlining the country’s taxation system and to ensure better revenue collection.
The proposed tax has been demonstrated against by the public through massive rallies and demonstrations, the latest of which occured in Dataran Merdeka on May 1. By some estimates, about 40,000 people converged on historic site to protest the implementation of the GST.
When winding up the debate in Parliament, Deputy Finance Minister Datuk Ahmad Maslan said the GSt must be implemented because the government fond the current tax collection system to be ineffective.
The Malay Mail Online reports him as saying, “We admit the current taxation system is quite weak and the government needs a new taxation system which is more effective for the country… and that is why we are introducing the GST.
“Does the opposition in protesting against the implementation of the GST wish to continue with the weak system when we have a more effective and transparent system which could reduce our dependence on petroleum tax.”
Ahmad said that although the GST could cause 1.8% rise in the Consumer Price Index, there was no cause for concern as the spike would be a temporary one before the normal process sets in on the new taxation system.
He added that the GST would be imposed on 689 goods, of which only 73 would see a price increase due to the new tax. 287 items are projected to see a price drop, and 329 items would not see a change in price. Another 255 goods are being reviewed.
Ahmad said GST would be imposed on 689 goods in which only 73 items will experience price hike, 287 items would see a price drop and price of 329 items will remain the same while 255 other goods are being reviewed.
To avoid traders who may arbitrarily raise prices, the government would be issuing a shoppers guide containing 1,000 types of goods, three months before GST was implemented, he said.
The difference between Sales and Service Tax 1975 (SST) was that it was a single tier tax while GST was staggered with tax imposed at various stages from production to distribution, he added.
GST will be introduced in April 2015 at 6 per cent to replace the SST of 16 per cent.
Photo: Justin Ng / Flickr
See Also:
GST Bill passes Dewan Rakyat, gets closer to making everything cost more
Thousands flood Dataran Merdeka to protest GST
Deputy Finance Minister: Proests or not, the GST is still coming
