KUALA LUMPUR: Around RM3 billion in revenue will be generated from the increase in the sales and service tax (SST) from six to eight per cent.
Prime Minister Datuk Seri Anwar Ibrahim said the two per cent increase in the SST which came into force on March 1, will not have a significant impact on inflation.
He said the increase in the SST focuses more on discretionary service-related and inter-business activities where the direct impact on consumers is minimal.
"Expenditure on food and beverages, as well as telecommunications, remains at six per cent, while expenditure on utilities such as water and petrol remains untaxed.
"The changes also do not reflect a significant impact on the inflation rate, which is recorded at around 0.2 percentage points based on data provided by the Statistics Department," he said during the prime minister's question time in Dewan Rakyat, today.
Anwar said this in response to Datuk Mohd Shahar Abdullah (BN-Paya Besar) who enquired about the impact on the cost of living for the people and the production costs of industries due to the increase in the SST.
Mohd Shahar also enquired about the additional revenue collection amount from the implementation of all new tax measures for this year.
Meanwhile, Anwar said the scope of the SST is still relatively small and only affects 41 per cent of the services sector.
"The number of service providers is also limited to the 60,000 entities registered with the Customs Department."
On other tax measures to increase government revenue, Anwar said the Capital Gains Tax is expected to raise RM800 million annually.
The government will also be able to save over RM4 billion in revenue through the restructuring of subsidies despite maintaining electricity tariffs for 85 per cent of consumers.
"The same approach (of targeted subsidies) was applied in the reform of taxes, which adopts a progressive approach, focusing more on increasing tax revenue from those who can afford it and ensure that the majority of the people are not burdened."
Anwar said the government also expected increased revenue from dividends from Bank Negara Malaysia, Petronas, and Khazanah Nasional's investments.
He said the investments by these entities yielded high returns.
"In 2023, investment income represented 65 per cent of non-tax revenue. Hence, I agree that additional efforts including the transformation of government-linked investment companies (GLICs) are needed to ensure an increase in domestic investments.
"With more active domestic investments, we hope non-tax revenue can also be increased."
