KUALA LUMPUR: Dr Mahathir Mohamad today thanked former deputy finance minister Ahmad Maslan for his offer of free advice on the tax system but said the sales and services tax (SST) is here to stay.
Speaking in the Dewan Rakyat here, the prime minister said the government had no intention of implementing a tax system that was rejected by the people.
He also said the SST would eventually outdo the goods and services tax (GST) in raking in revenue.
Maslan had yesterday offered to provide advice on the tax system if Pakatan Harapan decides to bring back the GST, which was replaced with the SST last September.
Mahathir, who became prime minister for the second time after the May 9 polls last year, acknowledged that there had been a shortfall in collection after SST was implemented but said this was expected.
He added that the situation would eventually correct itself.
“Thank you for offering your consultancy services, but your advice will destroy the government,” he said.
“When a tax is introduced, the collection will experience a shortfall because of the adjustment. But in years to come, SST will collect more than GST,” he said to Ismail Mohamed Said (BN-Kuala Krau) during ministerial question time.
Ismail had asked how the government would tackle the RM20 billion shortfall in collection.
Speaking during question time today, Maslan said inflation had dropped from 3.2% in 2015 to 2.3% after GST was introduced.
“Our black economy is at RM30 billion. That is why we need GST,” he said.
However, Mahathir said the previous government had consulted “unqualified people” who advised it on the introduction of GST.
“GST caused the people to be taxed twice at every transaction. That is why they are not comfortable with GST,” he added.
He said the SST only needs to be managed well, and that the government is in the midst of improving the system.
“Changes in tax system should not be done frequently, or it may have an impact on investor confidence,” he said.