Syed Saddiq Syed Abdul Rahman, former Muda president and lawmaker for Muar-Muda, has raised concerns over the recent increase in service tax, accusing the government of dishonesty and lack of transparency.
Addressing the Dewan Rakyat, Syed Saddiq criticised the government’s decision to include maintenance and repair services under the increased tax scope without proper stakeholder consultations. He claimed that this inclusion was made through backdoor means, just days before the tax hike came into effect on March 1.
“Last week, just three days before the (increased) tax was enforced, the government, through backdoor means, included a new sector in the tax scope (covering) maintenance and repair services,” Syed Saddiq said when debating the royal address in Parliament.
“(The sector) was included last-minute without being tabled in Parliament and no consultation sessions were held beforehand.
“The move has received backlash from experts (since) it was a hasty decision executed without transparency.
“The inclusion of the sector is very broad and general. The people are asking if (the tax) will affect laptop, handphone and car repairs. It’s obvious that this will affect the people’s cost of living,” he added.
Syed Saddiq emphasised the lack of transparency in the decision-making process, stating that no consultation sessions were held beforehand.
He expressed worries over the broad and general nature of the inclusion, raising concerns about its impact on the cost of living, particularly affecting services like laptop, handphone, and car repairs.
Opposition lawmaker Datuk Radzi Jidin of Putrajaya-PN echoed Syed Saddiq’s sentiments, accusing the government of failing to disseminate accurate information regarding the service tax increase.
He pointed out discrepancies in communications, particularly regarding the logistics sector, which was initially stated to be unaffected but was later revealed to be subject to a 6% SST rate.
In response, Syed Saddiq acknowledged the concerns raised by Radzi, highlighting the potential for a “tax-on-tax” scenario, which could significantly impact the prices of basic necessities.
He criticised the government’s assertion that the increased tax rate would not affect lower-income households, arguing that it covers a wide range of daily activities and services used by people across all income brackets.
The increased service tax rate of 8% affects various services, including management, maintenance, warehousing, sports facilities, insurance, customs, and vehicle services.
The tax hike, announced in Budget 2024, was gazetted on February 23 under the Service Tax (Amendment) Regulations 2024.
The government has maintained that the higher tax rate will not affect consumer basics such as food, beverages, and electricity usage below RM220.
However, concerns persist among lawmakers and the public regarding the broader implications of the tax increase on the cost of living and economic stability.
