00:00Today, we have a keynote address from Mr. Wang.
00:03What is the main culprit in 2024 behind the rising costs and the operational inefficiencies
00:10that places a burden on businesses, particularly our SMEs?
00:15The PINSA, through a petition and various statements, have highlighted that the inefficient tax structure,
00:27especially the sales and service tax SST, poses several challenges for businesses.
00:34The SST has been identified as imposing a tax-on-tax effect,
00:39where businesses tax on inputs that have already been taxed,
00:44leading to a cascading and compounding impact that artificially inflates price for consumers.
00:52This, in turn, reduces consumer purchasing power and adversely affects businesses.
00:59Unlike the GST, the SST appears to lack features like adequate reimbursement for businesses
01:07and real-time electronic filing capabilities, which further complicates operational efficiency.
01:15To make matters worse, this year saw an increase in SST rates from 6% to 8% across various categories
01:25alongside the introduction of new taxes such as the low-value goods tax
01:30with the potential high-value goods tax set to follow.
01:34This combination complicates compliance for businesses and reduces consumer purchasing power,
01:41especially affecting the B40 group.
01:44Insights findings indicate that despite projected collection of RM200 million to RM300 million
01:51from the low-value goods tax, which is 10% on goods valued at RM500 or less imported into Malaysia,
02:00and RM700 million from the potential high-value goods tax,
02:06total collections still far short of average GST values.
02:13If the GST had not been abolished, it would have collected RM63.5 billion
02:21and doubled the projected SST collection of RM35.8 billion in 2034,
02:30an indication of the GST's broader and more efficient tax base compared to the current SST framework.
02:39I think it is about time for us to revisit GST and consider its pre-implementation.
02:47Ladies and gentlemen, this year also sees a bold move with the rationalisation of fuel subsidies.
02:56Subsidies for diesel were lifted for a large number of users early last month
03:03and subsidies for RON95 petrol are expected to be lifted soon.
03:09A big surprise.
03:11The impact on the economy is anticipated to be significant due to larger consumer-based reliance on RON95.
03:21How will the roll-out be managed?
03:25Will there be adequate assistance provided to deserving consumer groups when these subsidies are lifted?
03:33We hope the assistance will be tiered based on individual needs rather than a flat rate figure
03:43similar to the RM200 duly madani rebate for eligible diesel users.
03:51Once the RON95 subsidy is lifted, we can expect spillover effects across various industries.
03:59Despite the assurances by the Authority to limit or prevent price increases,
04:05it is economically inevitable that such spillovers will occur.
04:11This would further diminish consumer purchasing power and make affordability less achievable.
04:18While we understand that subsidies substantially burden government expenditure
04:24and rationalisation is necessary for efficient fiscal management,
04:29it is now the right time to implement fuel subsidy rationalisation
04:33given the rising trajectory of taxes, prices and the overall cost of living in Malaysia.
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