The Federal Government is weighing out the possibility of exempting people from paying the Good and Services Tax (GST) on RON95 petrol and diesel when the new tax is introduced on April 1 next year.
Deputy Finance Minister Datuk Seri Ahmad Maslan said the move was still being considered, since at the moment sales of RON95 and diesel fuel are are exempt from the sales tax, at the rate of 58.62 sen and 40 sen respectively.
As it is, the subsidy and tax exemption on the sale of these fuel types is costing the government a fair amount of reserve funds and revenue.
“However, the government has yet to decide whether or not to impose GST on petrol and diesel.
“We want to see how much we can save from this effort before taking another subsidy rationalisation move,” he said when winding up debates on Supplementary Bill 2014 at the committee level at the Dewan Rakyat yesterday, according to The Rakyat Post.
When it is introduced next April 1, the GST of 6% will be replacing the outgoing sales and services taxes, which currently total up to 16%. However, the GST is expected to apply to far more items than the existing sales and services taxes.
Ahmad noted that currently, the retail price of RON95 petrol was RM2.10 per litre with a 71 sen government subsidy, while the price of diesel was RM2 per litre with a 74 sen subsidy.
