KUALA LUMPUR: Consumer groups have urged the government to exclude services used by the people on a daily basis from the Services Tax, as they fear that it could lead to higher cost of living.
Federation of Malaysian Consumers Association (FOMCA) deputy president, Mohd Yusof Abdul Rahman, said services which cover daily necessities such as food should not be taxed.
“Take food trucks, for example. If these are taxed too, it will indirectly lead to higher food prices. The people will feel the effects.
“This is a major concern among many as cost of living is a subject close to the people’s hearts. In fact, Pakatan Harapan (PH) had before this pledged to tackle cost of living so that it doesn’t burden the people,” he said.
Mohd Yusof said the government need to review the list of taxable services as it could have a direct impact on the people.
Pertubuhan Mesra Pengguna Malaysia (PMPM) deputy president, Azlin Othman, shared the same view and urged the government to review the list of taxable services.
“Even though the GST (Goods and Services Tax) is now zero-rated, the prices of goods including food have yet to go down. My concern is that if they are not exempted, the prices of goods will continue to rise,” she said.
She said if the government is keen on implementing the tax, then tax on services used by the people daily should be reduced to one per cent, as opposed to the proposed six per cent.
“The Domestic Trade and Consumer Affairs Ministry should also play a more serious role in monitoring traders to ensure that they do not take advantage of the situation to the extent that it burdens the people,” she said.
Finance Minister Lim Guan Eng, in tabling the Services Tax 2018 bill for its second reading in the Dewan Rakyat on Wednesday, said services which would undergo improvements and tax unformity measures include restaurants which also encompass catering, takeaways, food trucks and others.
However, such businesses would only be taxed if they generate annual sales of RM1 million.