THE SST WILL EVENTUALLY BURDEN THE PEOPLE

THE SST WILL EVENTUALLY BURDEN THE PEOPLE

By: Khairul Faizi bin Ahmad Kamil | 12 June 2025

The aspiration of the Madani Government to broaden the scope of the Sales and Services Tax (SST) may be seen as a strategic move to increase national revenue. However, its implementation will eventually burden the people, particularly in an economy that has yet to fully recover. The notion that such taxation adds pressure on citizens is not mere political rhetoric, but one that is grounded in the daily realities faced by the majority of households.

The government argues that the expansion of SST is progressive and targeted. However, at the grassroots level, the reality is starkly different as the people begin to feel the direct impact through rising prices of goods and services.

1. Rising Cost of Living

Although essential goods such as chicken, rice, and cooking oil are exempted from SST, many services commonly used by ordinary citizens remain taxable. These include private healthcare, private education or tuition, leasing services, and construction.

The M40 group and parts of the B40 population, who increasingly rely on the private sector for education and healthcare, will be directly affected. They will be forced to bear higher costs for these essential services, further straining their household finances.

2. Tax Passed on to Consumers

It is common practice for businesses and service providers to pass the burden of taxation onto end-users through price hikes. In the end, it is the people who will bear the cost.

Although the government often deploys enforcement officers to monitor pricing, the effectiveness of these measures remains questionable. The effect of SST might appear minor on an individual basis, but when aggregated, it becomes a significant burden on monthly household expenditure.

3. The Squeezed Middle Class

The middle-income group (M40) now finds itself in a very precarious position. They are not eligible for targeted assistance such as the Rahmah Cash Aid (STR) or SARA, yet they are also not affluent enough to absorb the rising cost of living.

SST, in this form, is a type of indirect tax that gradually erodes their disposable income. Worse still, this burden emerges at a time when economic growth has yet to translate into equitable benefits for all segments of society.

4. Doubts Over Tax Revenue Transparency

The government often asserts that SST revenue will be channeled toward development and assistance for the people. However, the public continues to question: Are these forms of aid truly reaching those who are eligible and genuinely in need?

Without guarantees of transparency and administrative efficiency, public confidence in the fair distribution of tax revenue will continue to erode. The people have every right to ask whether these collections are being used wisely, or merely to cover administrative wastage and mismanagement.

Conclusion

Although the new implementation of SST is claimed to be more targeted and fair, the cascading economic effects will still make it an additional burden on the people. This is especially true in a climate where wages remain stagnant, while housing, rent, and food costs continue to rise unabated.

The government should not dismiss the concerns of its citizens. In the current economic climate, priority must be given to efforts to increase household income, not add to their burden through indirect taxation.

KFAK