00:01The expansion of the sales and service tax set to take effect next month will strengthen
00:06the government's fiscal buffer amid rising global uncertainty fueled by wars, trade tensions
00:12and shifting U.S. policies.
00:15Economists say the move could help reduce national debt, raise tax revenue and create
00:19more fiscal space for spending on critical areas such as healthcare, education and targeted
00:25assistance for lower-income households.
00:28They also claim it is a safer and less costly option compared to reinstating the goods and
00:33services tax which would take time and effort to restart.
00:37Bajai Bardai of the Malaysia University of Science and Technology said the SST expansion is not
00:44aimed at cost savings but at boosting revenue to help narrow the country's budget deficit.
00:51He said the government expects SST collection to hit 52 billion ringgit this year, surpassing
00:56the 29 billion ringgit in its first year and even GST's peak of 42 billion ringgit and
01:02believes SST can be developed into a better tax system than GST.
01:06Meanwhile, Sunway University's Yakim Leng pointed out that the country's tax to GDP ratio presently
01:13hovers just above 12 percent, one of the lowest levels in decades.
01:19He said that as the country can no longer rely on petroleum revenue or shrinking income taxes,
01:25it needs sustainable and stable revenue sources, and expanding the SST is a step in the right
01:30direction to gradually raise revenue and avoid a higher deficit.
Comments