Khairy Jamaluddin has urged the Pakatan Harapan government not to let politics determine economic policies.

Arguing against the scrapping of GST, the Rembau MP said the government should adopt a rational approach in such matters.

“(I) Am aware GST is a big political issue for the government but they must approach the issue rationally. Don't scrap GST because of politics.

“Adjust the rate so its revenue is neutral to your SST. Don't let politics determine economic policy,” he tweeted this afternoon.

The Umno lawmaker also vowed to raise the matter during the debate session in the Dewan Rakyat tomorrow.

According to Khairy, the GST is a more efficient tax compared to the SST.

“Instead of SST, the government should keep GST but at a lower rate that will effectively give same revenue as 10/5 percent SST. Could be set at 3-4 percent.

“SST is inefficient with many leakages,” he said.

'SST will be ineffective'

Meanwhile, in a separate statement, Senator Khairul Azwan Harun (photo) said that Malaysians are now facing a far higher tax rate, than the zero-rated GST.

"Eventually, as we have been warning all along, the tax will prove to be ineffective with less revenue to be collected. The tax-free haven is coming to a close and the new Harapan government has been through the books trying to figure out how to implement their SST without the backlash from the rakyat.

"The task is impossible and Finance Minister Lim Guan Eng looks like a lonely figure as his colleagues leave the new tax plan for him to carry alone. More and more, the rakyat is realizing that this government does not have a solid plan moving forward," he said, further urging the government to explain how it plans to control the prices of goods, moving forward.  

Earlier, Prime Minister Dr Mahathir Mohamad reiterated that the government would ensure Dewan Rakyat repeals the GST law tomorrow.

He also responded to criticism on the SST.

"If you do not purchase (under SST), you do not pay. Whereas GST is a tax at the source, so whether you buy or not, everything will go up in price," he said.

There were brickbats after Finance Minister Lim Guan Eng announced yesterday that the SST rates would be 10 percent for sales and six percent for services.

Netizens were concerned that this would cause prices to increase higher than it did under the GST, which was at six percent for both goods and services.

Repealing the GST, which was introduced during former prime minister Najib Abdul Razak's tenure, was among the main weapons in Harapan's arsenal for the May 9 general election.

A week after the election, the Finance Ministry announced that the GST rate would be reduced from six to zero percent effective June 1.

The announcement came shortly after Mahathir announced that he had instructed the government to stop collecting GST.