Sales Tax in Force

Sales Tax in Force

Without doubt, the Opposition’s ferocious attack on the 5% Sales Tax in Parliament, the people’s general condemnation of it in the country, and the DAP’s warning in Parliament during the debate on the Sales Tax Bill that the DAP would continue to oppose the 5% Sales Tax inside and outside Parliament until it is repealed, has had its effect on the Finance Minister, Tun Tan Siew Sin.

This is why the Finance Minister has now broadened the scope of the exempted items from the Sales Tax, as compared to his original intention as expressed in his Budget speech on 6th January to only exempt basic necessities and raw materials essential for key manufacturing industries.

The DAP remains opposed to the 5% Sales Tax, because its working cannot but raise the cost of living of the people at a time when the people and the poor are facing great economic hardships arising from the low price of rubber, high unemployment and already very high cost of living in the country.

The Sales Tax Act requires dealers and salesman to keep very cumbersome and burdensome records which can only add to the frustrations and difficulties of the petty traders.

Furthermore, the Sales Tax Act gives powers to the Finance Minister to withdraw the present list of exemptions, and it is not unlikely, that in the near future, part after part of the presently exempted items are withdrawn, the Finance Minister will also have the power to increase the rate of the Sales Tax from 5% upwards.

All in all, the Government has not exhausted all possibilities of raising revenue without adding increasing burdens on the poor. The Government, for instance, has not fully exercised economic austerity in its expenditures, which will be able to come to quite a sizable sum.

The DAP calls on the Government to give an assurance that the present list of exemptions will not be withdrawn in the future under any circumstances, and secondly, that it will further broaden the scope of exempted goods to avoid its oppressive effects on the poor.