The higher income group is paying a much higher rate for the Goods and Services Tax (GST) compared to the lower income groups due to high consumption of taxed goods and services, Finance Ministry said.
In a parliamentary written reply, the ministry said it is not true that lower income groups are paying more compared to the higher income group after the implementation of GST.
“In fact, the high income group is paying more than the low income group due to their higher consumption of the goods and services that are taxed.
“This shows that the GST move is progressive,” the ministry said in reply to Oscar Ling Chai Yew (DAP-Sibu).
Ling had asked the ministry to state the total taxes collected under GST and rate of inflation as well as the increased cost of living.
The ministry said when the Sales and Services Tax (SST) was implemented, those with RM2,000 and below monthly income will spend about 1.84% of their income, that is RM36.63 a month compared to the 2.8%, or RM168 a month for those with RM8,000 monthly income.
“Under GST, the same group of people spend RM51.89 (2.59%) and RM290 (4.14%) respectively,” it said.