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SATURDAY | JUNE 21, 2025

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Nation not ready for GST yet, says PM o ‘Reimplementation proposal not completely rejected but postponed because income of people still too low’

Sugar price not affected by SST

Ű BY FAIZ RUZMAN newsdesk@thesundaily.com

PETALING JAYA: The Finance Ministry has clarified that the revision to the Sales and Service Tax (SST) effective July 1 will not affect the retail price of refined sugar. It said in a statement that refined sugar, commonly referred as white sugar, remains exempt from SST. It said the revised SST takes a targeted approach to protect the public from price increases of essential goods, which include sugar, salt, chicken, eggs, meat, fish, vegetables, cooking oil and rice. Under the revised framework, a 5% sales tax will be imposed on raw sugar, which is used to produce refined sugar. The ministry said manufacturers are entitled to apply for exemptions for input materials, including raw sugar. “Therefore, there should not be any increase in the price of refined sugar.” It said refiners of sugar continue to receive monthly government incentives to ensure price and supply stability. Manufacturers can apply for the tax exemptions through the Customs Department under Item 1, Column (2), Schedule B of the Sales Tax (Persons Exempted from Payment of Tax) Order. Prime Minister Datuk Seri Anwar Ibrahim yesterday directed all government departments to cease using imported goods, particularly food items, at official events in a bid to promote local products. He said using local produce would not only bolster the local economy but also offer more opportunities for local farmers to market their goods. “If every government department follows this directive, it would create more opportunities for our farmers to supply local food ingredients,” he said at the Finance Ministry monthly assembly. He also cited neighbouring countries as examples, noting their firm commitment to using local food products at all official events. – Bernama Malaysian battalion in Lebanon honoured KUALA LUMPUR: A total of 155 officers and personnel from the Malaysian Battalion (Malbatt) 850-12 were awarded United Nations (UN) medals during a ceremonial parade held at Camp Marakah in Lebanon on Thursday. Malbatt 850-12 said in a statement the recipients included 20 officers, 134 rank-and-file personnel and one administrative and diplomatic officer. “Leading the list of honourees was commander Kol Johan Effendi Mohd Shalleh, who received the medal as a symbolic recognition of his leadership and key role in the successful execution of the mission. “The medals were also presented to senior officers and all other personnel by United Nations Interim Force in Lebanon Western Sector commander Brig-Gen Nicola Mandolesi.” The parade was led by Malbatt 850-12 deputy commander Lt-Kol Firdaus Shah Budin and accompanied by a military band from the Ghanaian battalion, Bernama reported. Also present was Malaysian Ambassador to Lebanon Azri Mat Yacob, who took part in the medal presentation as a gesture of the Malaysian government’s support and appreciation for the battalion’s contributions to international peacekeeping. “The awarding of the UN medal is a formal recognition of Malbatt 850-12’s contributions to regional peace and their professional and dedicated execution of international duties.”

He acknowledged the government’s weakness in terms of policy communication to the people and called on all parties to provide more active explanations about the policies implemented to avoid confusion and baseless accusations. “I hope my friends (in the government) will please explain. Sometimes, we are defensive. We just let people attack and we don’t respond.” GST was first introduced on April 1, 2015 as part of fiscal reforms to replace SST, with an initial rate of 6% imposed across the board on almost all goods and services. However, GST received widespread criticism from various sections of society for allegedly burdening consumers, especially the low-income group. The tax system was officially abolished on Sept 1, 2018 and replaced with SST. On June 9, the government announced that it would implement a targeted review of the sales tax rate and expand the scope of the service tax effective July 1, in line with strengthening the country’s fiscal position by increasing revenue and broadening the tax base without burdening the people. The sales tax rate remains unchanged for essential goods while a rate of either 5% or 10% will be imposed on non-essential or discretionary goods.

PUTRAJAYA: The Goods and Services Tax (GST) is an efficient and transparent taxation system but it is not suitable for reimplementation yet because the people’s income threshold is still low, said Prime Minister Datuk Seri Anwar Ibrahim. He said the government has not completely rejected the proposal to reimplement GST but the ability of low income earners must be taken into account first because the taxation system has a comprehensive impact. “We postponed it because the income of the people was still too low. My opinion at that time was that people with an income of RM2,000 were still affected although we gave some exemptions. “Sugar and rice were not affected, but when people bought other goods or rode the bus, indirectly GST (was imposed), meaning it was comprehensive,” he said during the Finance Ministry’s monthly assembly. Anwar, who is also finance minister, said the government believes that the reimplementation of GST should only be

considered when the average income of the people has increased to a more reasonable level of at least RM4,000 a month. “Right now, there are people earning RM1,700 or RM2,000. Maybe I was not wise in making this decision, but my intention is not to introduce taxes that will have a detrimental effect on the lower-class people. That’s all.” Anwar said based on this view, the government chose to implement a more targeted Sales and Service Tax (SST), the revenue from which would be used to increase allocations to key sectors such as education and health. “We are taking this tax to return it to the people. The allocation for the Education Ministry has increased from RM58 billion in 2024 to RM64 billion this year.” He added that the allocation for the Health Ministry, which was RM41 billion last year, is RM45 billion this year, Bernama reported. Anwar said any national fiscal policy decision, including tax implementation, must be viewed from a macro perspective.

Govt focused on reducing national deficit PUTRAJAYA: Prime Minister Datuk Seri Anwar Ibrahim said the government is committed to consistently reducing the country’s fiscal deficit to ensure a more sustainable economy and maintain investor confidence. reduced to 4.1% in 2024, and is expected to be 3.8% this year. “Some people ask why we want to reduce the deficit so much. Why not just give more to the people? But if we don’t do it this way, investor confidence will not be there. “For me, the foremost responsibility of He said the fiscal deficit, which was at 5.5% when he assumed leadership in 2022, was

leadership and economic management is to implement policies that we believe are good. That is what matters most. “Secondly, with investor confidence, we can solve many issues related to national revenue, job opportunities and overall development,” he said yesterday. – Bernama

FULL FOCUS ... The prime minister’s wife Datuk Seri Dr Wan Azizah Wan Ismail viewing an exhibition held in conjunction with the launch of a spine and paediatric orthopaedic care scientific congress in Kuala Lumpur yesterday. – BERNAMAPIC