In a statement, Lim said the SST was only taxable on 38% of the consumer price index basket of goods and services, compared with the GST which covers 60%.
“The SST is a single-stage tax, a sales and services tax imposed on manufacturers and not on end customers.
“The GST, meanwhile, is a multi-stage tax where tax is payable by all parties in the supply chain,” he said.
Technically, he added, suppliers could claim back GST as input tax from the government. However, this would still cause a huge problem with operating cash flow for many businesses as the government had been “notoriously slow” in refunding GST claims, he said.
“This has resulted in higher costs and ultimately the end customers have to bear the cost with higher prices for goods and services.”
He was responding to Umno members including former prime minister Najib Razak who had said the SST would push up the cost of living instead of reducing the people’s financial burden.
Najib, who introduced the 6% GST, also said the Pakatan Harapan (PH) government’s decision to do away with the consumption tax had not led to a drop in prices for a majority of items, as expected by the people.
Former Umno Youth chief Khairy Jamaluddin meanwhile said he would table a motion in the Dewan Rakyat to retain the GST, arguing that it was more transparent and efficient than the SST.
Lim said Najib had so far failed to explain how the SST could burden the people more than the GST given that the expected collection from the SST was estimated at RM21 billion for a full year, against the estimated GST collection of RM44 billion for 2018.
“The rakyat have not yet received any response as to how the GST is better for them when it collects RM23 billion more in taxes,” he said.
He added that Khairy’s call for the GST rate to be lowered to match the revenue expected from the SST contradicted Najib’s stand that the SST burdened the people more than GST.
“It is very obvious that the only party which politicises this issue is Umno.
“On one hand, Umno demonises the new PH government for implementing the SST, which will purportedly burden the people more, but on the other hand, it concedes that the GST needs to be reduced to match the lower expected revenue collection via SST.”
Lim said the PH government acknowledged that the SST would still have an impact on the people.
“But there is no doubt that the impact from the SST will be less than GST by almost half – RM44 billion collected by GST versus RM21 billion by SST.”