PARLIAMENT | Umno president Ahmad Zahid Hamidi has given the government one year to prove that replacing the goods and services tax (GST) with the sales and services tax (SST) will indeed lower the cost of living.

 

"Let's wait for Sept 1, when it (SST) will be implemented... we will give them one year after that, (to see) whether the price of goods and cost of living is lower with the implementation of SST," Zahid said at a press conference in Parliament today.

Pakatan Harapan had blamed the six percent GST for high living costs and vowed to abolish it under its election manifesto.

Its plan to reintroduce the SST sees many items, such as processed foods and cars, being tax-exempt.

Malaysia had previously levied a sales tax and services tax since the 1970s. Both taxes were abolished after the GST was introduced on April 1, 2015.

Taxable goods under the new SST will be taxed at five or 10 percent, while certain services will be subject to six percent tax.

However, Zahid said there is no evidence that zero-rating the GST has had any impact on living costs.

"Even when GST was zero-rated, prices did not go down. The same goes for petrol prices, they have to follow the market price," he said.

He said Harapan should not make such election manifesto promises if the coalition could not fulfil them.