SST expansion 'not divine law', Anwar's aide says govt open to review

Summary

• Kamil Abdul Munim, Anwar Ibrahim’s aide in the Finance Ministry, says the SST expansion is not “divine law” and can be reviewed if necessary.

• He says dissatisfaction towards the measure is normal but the important thing is that the majority of people are not burdened.

An aide to Prime Minister Anwar Ibrahim, in his capacity as finance minister, today said the government is open to reviewing the expanded sales and service tax (SST), which will take effect from July 1.

Kamil Abdul Munim reportedly said the legislation is not “divine law”, and so while the new rates will continue to be enforced, future changes remain possible if necessary.

“Of course, there are bound to be concerns or dissatisfaction whenever a new policy is implemented. This is normal,” he said.

“This might not be the perfect policy, but if there are segments or sectors that require reconsideration, I believe the government will look into those concerns seriously.

“This is not divine law, it’s human legislation. So, there’s no issue if adjustments or improvements are needed. What’s important is that the majority of the people are not burdened by this expansion,” he was quoted as saying by Malay Mail.

Tax expansion for fiscal sustainability

In defending the SST expansion, Anwar previously fuelled criticisms after he cited avocados as an example of an imported luxury fruit typically consumed by high-income earners.

Critics reminded Anwar that imported produce includes fruits such as apples and oranges, which are not grown in Malaysia but widely consumed, including by lower-income earners.

Kamil also reiterated that essential goods will not be affected by the SST expansion, which he said is necessary to strengthen the country’s fiscal foundation.

“Malaysia has one of the lowest tax bases in the region, and the move to widen the SST coverage is aimed at enhancing fiscal sustainability without causing hardship to the public,” he reportedly said in Tambun after visiting a victim of last month’s Federal Reserve Unit truck crash in Taman Desa Tambun, Perak.

His comments came amid mounting calls from six major business groups urging the government to postpone the tax changes.

The groups had warned that the wider scope, which includes an eight percent tax on commercial rental and leasing, could hurt investor confidence, raise operational costs, and dampen consumer sentiment in an already challenging economic climate.

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