KUCHING: Sarawak United Peoples’ Party (SUPP) Kuching Branch Youth Section’s Training Secretary, Raphael Yong, has voiced serious concern over the Ministry of Finance’s latest expansion of the Sales and Services Tax (SST), describing it as a move that fuels inflation and worsens the economic strain on ordinary citizens and small businesses.
Effective July 1, the revised SST sees not only an increase in the tax rate from 6 percent to 8 percent but also an expanded scope to include services such as leasing, construction, finance, private healthcare, and some segments of the education sector. Certain non-essential goods now carry tax rates of up to 10 percent.
Yong said these changes have triggered a fresh wave of price hikes, further raising the cost of living and impacting small and medium enterprises (SMEs) already struggling to cope.
“The Ministry has been making frequent, ad-hoc changes to the SST framework in recent years with little consistency or clarity. SMEs are overwhelmed by system overhauls and cost pressures, while the general public continues to bear the brunt of every new tax revision,” he said.
He also criticised recent remarks made by Deputy Finance Minister Amir Hamzah, who claimed that the reforms would not affect the majority and that essential goods would remain untaxed.
“That is far from the reality. The prices of eggs and chicken have increased by more than 13 percent in the past two years, vegetables by 4 percent to 8 percent, and food inflation overall has reached 4 percent to 5 percent,” he stated.
Yong added that during community outreach efforts, the Kuching Branch Youth Section had encountered widespread dissatisfaction with the tax changes.
Many residents, from business owners and street vendors to homemakers, expressed that they were struggling to cope with the added financial pressure. Some described the SST expansion as a form of prolonged hardship, likening it to sacrificing long-term sustainability for short-term fiscal gains.
While acknowledging the need to increase national revenue, Yong stressed that any effort to do so must come with real benefits to the people.
“The Unity Government has implemented various tax mechanisms that may enrich national coffers, but have done little to improve the rakyat’s standard of living. At the same time, corruption, spending leakages, and a bloated civil service continue to weigh down public finances with no clear solution in sight.”
He urged the Ministry of Finance to stop using the term “reform” as a convenient justification to roll out new taxes as true reform should aim to ease the burden on the people and rebuild public trust in the economy and not mask fiscal mismanagement through increased taxation.
By Connie Chieng