The implementation of the sales and service tax (SST) is expected to have a low and manageable impact on households, according to early projections by the finance ministry.
Deputy finance minister Lim Hui Ying said this was due to various relief measures and exemptions aimed at ensuring that the tax burden is shared fairly and borne mainly by those with the capacity to pay, reported Bernama.
“It is still too early to gauge the full impact of the expanded SST on the public as it only took effect on July 1,” she told the Dewan Negara during a question-and-answer session today.
“However, based on initial projections, the overall impact on households is estimated to be low and manageable.”
Lim was responding to Senator Ros Suryati Alang, who asked about the effects of the SST’s expansion and whether it had helped the government finance its expenditure without increasing borrowing.
She said the broadened SST scope was expected to raise an additional RM5 billion this year, strengthening public finances and reducing reliance on loans.
“This revenue, together with prudent spending, allows the government to meet operational and development expenditures without the need to increase loans or incur high debt,” she said.
Lim added that the extra funds enabled the government to maintain subsidies on basic goods through programmes such as Sumbangan Asas Rahmah and Sumbangan Tunai Rahmah, which help ease the cost of living for households.
