Amir said the government would always take into account an approach where the burden of taxation on the people, especially the vulnerable groups, can be reduced.
“For instance, we refrain from imposing service tax in areas where the entire population is involved, and in business-to-business (B2B) transactions.
“So, if there is no B2B involvement, there is no ‘tax-on-tax’ incurred,” he told the Dewan Rakyat during minister’s question time today.
He added that there are service tax exemptions for businesses engaged in exports.
Amir was responding to a supplementary question from Radzi Jidin (PN-Putrajaya) on whether the impact of the sales and service tax (SST) on the people was similar to the previous goods and services tax (GST), but with lower revenue for the government.
The GST was introduced in 2015 and replaced by the SST on Sept 1, 2018, after Pakatan Harapan dislodged Barisan Nasional from Putrajaya less than four months earlier.
In October last year, when Prime Minister Anwar Ibrahim announced the decision to raise the SST rate from 6% to 8%, he said the revenue to the government would amount to 11.8% of the GDP.
In the Dewan Rakyat, Amir also reiterated that the government had no plans to reintroduce GST at the moment, citing its broad-based consumption tax nature.
He said the current economic situation, especially for low-income individuals, did not favour the reintroduction of GST.
“Although the average inflation rate in 2023 was 2.5%, for food and beverages it was nearly 5%. This category is more acutely felt by the general population.
“By maintaining the service tax rate at 6% for food and beverages, the government will continue to prioritise improving the existing tax system and introducing taxation that does not affect vulnerable groups before considering the need to introduce new consumption taxes such as GST,” he said.
Amir was responding to another supplementary question from Syed Abu Hussin Hafiz Syed Abdul Fasal (PN-Bukit Gantang) on whether the government was prepared to reintroduce the GST.