KUALA LUMPUR: The government will work towards enhancing communication among stakeholders before introducing new tax measures, said Finance Minister II Datuk Seri Amir Hamzah Azizan.
The service tax rate increase from 6% to 8% implemented from March 1, he added, was based on discussions with various stakeholders.
“The service tax rate increase from 6% to 8% was introduced and announced in Budget 2024 ... there was a lot of consultation done with various groups to ensure that we figured out the key things,” he told reporters after the launch of Skim Jaminan Pembiayaan Perniagaan (SJPP) and Skim Jaminan Kredit Perumahan (SJKP) today.
Amir Hamzah said the key element of the service tax rate increase is to generate higher revenue for the government.
However, he added, while the government recognises the need to increase its revenue, it is important to “limit the damage” to stakeholders and those who are involved.
Amir said the government will strive to enhance communication among its stakeholders affected by the service tax hike.
“At the same time, as anything that goes out, sometimes communication could be a little bit better and we recognise that we should do a little bit more on that side,” he explained.
Amir Hamzah said the higher revenue collected from the revision of the service tax will be redistributed to help those in the lower end of society.
He cited examples such as the various programmes conducted last year to enhance infrastructure – upgrading of school toilets and improving the living conditions or quarters of government servants, including those in the police and armed forces.
“This redistribution based on an increase in revenue is actually very, very good, because it is actually about helping society at large,” he added.
Asked if the government would consider a more streamlined tax structure like the goods and services tax (GST), Amir Hamzah remarked that takes time for deliberation before any tax implementation, therefore the government will focus on existing tools or mechanisms in generating higher revenue
“I think the GST is a tax structure that we're always continuing to look at and it will take some time before we review everything but at this point in time, our focus is actually on the tools that we actually have, such as SST (sales and service tax) and so on,” he said.
During the launch, Amir Hamzah announced that SJPP Bhd and SJKP Bhd have started accepting applications from financial institutions which offer special government guarantee schemes tabled in Budget 2024 to assist micro, small and medium enterprises (MSME) as well as first-time home buyers who do not earn fixed income.
The SJPP guarantee is part of Budget 2024’s aim to provide financing worth RM44 billion to MSME this year.
Amir Hamzah said SJPP has been given approval to provide financing guarantees for up to RM20 billion and is expected to guarantee up to 90% of the financing for MSME, particularly those involved in the green economy, advanced technology, healthcare and halal businesses.
“So far, SJPP has guaranteed more than 100,000 MSME with a total disbursement exceeding RM75 billion,“ he said.
