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BN senator moots independent committee to oversee SST collection

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The government must set up an independent committee to monitor the collection of the sales and services tax (SST) which is being reintroduced to replace the goods and services tax (GST), a BN senator said today.

Speaking during a press conference at the Parliament, Khairul Azwan Harun said a monitoring mechanism was necessary as there were various concerns raised over a lack of transparency in the overall SST system, in comparison to the GST.

“We are aware that tax collection involves several agencies, including the Inland Revenue Board and the Royal Malaysian Customs Department. Although the agencies all fall under the Finance Ministry, there are still several heads of agencies involved.

“Therefore the process to harmonise these agencies is an extremely important matter to be given attention by the finance minister and the government,” he said after the BN-controlled Dewan Negara, through a voice vote, passed one of the five bills related to the return of SST on Sept 1.

Khairul added that he had also raised the suggestions during his earlier debate of the bill in the upper house.

Commenting further, he said among concerns raised include a drastic reduction over the number of companies registered under the GST regime, as compared to SST.

“I am concerned over the ‘loss’ of registered companies, from over 450,000 under the GST system, and to date, I was made to understand under the SST system there are only about 77,000 companies.

“So in terms of enforcement, there could be an element of preference and therefore there needs to be an independent monitoring committee,” he said.

Among others, Khairul argued that a lack of transparency under the SST system could trigger the creation of a “black economy” fueled by unrecorded transactions.

“I also raised the issue of ‘transfer pricing’ whereby multiple companies are owned by the same person, but only the lesser-earning company is registered (to pay taxes)."

Khairul said other issues he had raised include the compounding and cascading effect of SST.

“All of these matters must be handled by the government, but it cannot be left solely to the related agencies. There must be an independent monitoring committee,” he stressed.

Currently, there are 32 BN and three PAS senators out of 55 in the Dewan Negara.

The four other Bills related to the SST are the Service Tax Bill 2018, Goods and Services Tax (Repeal) Bill 2018, Customs (Amendment) Bill 2018 and Free Zones (Amendment) Bill 2018.

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