There is not much difference between the government revenue raised through SST and the actual revenue that can be raised through GST, according to Prime Minister Dr Mahathir Mohamad.
He said the unpaid GST input tax refunds has given the impression GST can raise more money for the government.
“So, there is not much difference between SST collections and actual GST collections. We find that it is adequate to introduce SST instead of GST that has collected so much until the rakyat feels pressured,” he told an interview broadcasted on TV1 today.
The government introduced SST to replace GST beginning on Sept 1.
On the even of SST’s implementation, Finance Minister Lim Guan Eng had said that the government expects to raise RM21 billion through SST next year, compared to RM44 billion through GST.
Previously, he had told the Dewan Rakyat that the GST Refund Trust Fund had a shortfall of RM19.248 billion since GST was implemented on April 1, 2015.
The money was supposed to be refunded to businesses with input tax credit claims within two weeks.
"The refund arrear was due to the cash flow problems faced by the (previous) federal government due to a lack of fiscal discipline, widespread wastage and ballooning debt.
"What was done by the previous government was a case of account falsification and misappropriation of the GST refunds for other purposes in order to cover the country's deficit and show a current account surplus," Lim told the Parliament on Aug 13.
He had since announced that the government intends to repay the arrears owed to businesses next year.