PUTRAJAYA must reintroduce the goods and services tax (GST) to help people adjust to rising cost of living resulting from the removal of fuel subsidies.

MCA cost of living committee head Monna Ong said this in a statement today.

She said Malaysians were already burdened by the hike in the sales and services tax (SST) rates from 6% to 8%. 

The situation was further aggravated by the introduction of new taxes and the expansion of the SST tax scope, she said.

“All this has burdened the people at all levels too much,” she said.

People will be further taxed when the fuel subsidies are removed this year, she said.

“We once again urge the government to reintroduce the GST, which the government itself had said was more transparent, fair, and less burdensome than the SST,” she added.

She said other business groups and industry players have also called for the reintroduction of GST.

She said SME Bank had predicted that diesel prices could rise by 71% if the diesel subsidy was fully withdrawn. This would result in an inflation rate increase of 7.1%, she said.

“Any reduction of subsidies will certainly lead to an increase in the cost of living, especially when diesel is the main fuel for transport, agriculture, and industry.

“This situation directly leads to an increase in transport and logistics costs, which will result in a price hike for goods, thus affecting the consumers,” she added.

She acknowledged that it was unreasonable for the government to continue providing subsidies but urged for safety nets to be set up to protect the people.

Pakatan Harapan abolished the GST in 2018. – May 15, 2024.