By Karen Bong
KUCHING, June 14: With just weeks to go before Malaysia’s expanded Sales and Services Tax (SST) takes effect on July 1, Kuching South City Council (MBKS) Mayor Dato Wee Hong Seng has voiced strong concern over its sudden rollout — particularly its potential impact on education and healthcare, questioning whether the federal government should instead consider reviving the Goods and Services Tax (GST) as a more balanced and transparent alternative.
Wee warned that the abrupt expansion of the SST could trigger a domino effect, squeezing small and medium enterprises (SMEs), driving up the cost of living, and worsening the economic pressures already felt by ordinary Malaysians.
“Every tax-related decision has a ripple effect. If the economy was booming, maybe it’d be easier. But go ask around — not one hawker or small trader will tell you business is good. So if businesses collapse, jobs are lost. That’s the real danger,” he shared during his weekly ShallWeeTalk Facebook live session with the community today.
According to the federal government, the expanded SST between 6-8 per cent is aimed at increasing national revenue by widening the scope of taxable goods and services. But Wee questioned the timing, planning, and clarity of the move, stressing that the lack of consultation and short notice are out of touch with economic realities on the ground.
“When drawing up a national budget, careful calculation and preparation are crucial. If new policies are introduced before people have even had time to adapt to the last ones, they’ll be overwhelmed. This drains the public — and that’s not good governance.
“Of course, the government needs revenue. But it must strike a balance — to protect SMEs and maintain stability in people’s daily lives. When tax burdens are passed down the supply chain, the consumer always ends up paying. We cannot treat taxation as merely a fiscal tool — it must reflect fairness and good governance. Only then will people accept it,” he stressed.
He added that the sudden announcement was creating uncertainty and chaos in the market.
Wee urged federal authorities to consider reintroducing the GST, which was abolished in 2018, noting that while it had its flaws, it remains a more structured and equitable system — especially if implemented with proper planning and reasonable rates.
“GST is one of the most democratic tax systems — it distributes the burden fairly and allows for better planning. It’s recognised globally. So why are we avoiding it?” he asked, calling for policies grounded in long-term effectiveness, not political optics.
The Mayor also pointed to growing frustration among the public, saying many feel blindsided by the policy shift. He cited cases where local goods are now more expensive than imports, undermining local producers and further straining households.
“We say we want to support local agriculture — yet local dragon fruit sells for RM10 while the imported ones go for RM8. Where’s the logic? If tax policies don’t help correct that, but instead add to the cost, what are we doing?”
He called for education and private healthcare services to be exempted from the SST, noting these are essential sectors that already burden lower- and middle-income families.
“Even if you’re poor, you can’t be poor in education. And healthcare is a necessity. When public hospitals are full, people turn to private clinics — don’t punish them for that,” he said.
Wee also questioned whether the government had explored sufficient cost-cutting measures before shifting the financial burden onto the public.
“If you’re not making money, don’t spend like you are. The government should lead by example — trim unnecessary expenses before asking the people to pay more,” he added.
He called on federal leaders to delay implementation, conduct proper stakeholder engagement, and show real empathy for everyday struggles before enforcing any major tax reforms.
“Don’t use taxation purely as a fiscal tool — use it as a reflection of your leadership. If people see the system as fair and stable, they’ll support it. But if they feel punished, you’ll lose their confidence — and that’s far harder to rebuild,” he said.
Wee ended his remarks with a plea for common sense, empathy, and leadership in shaping Malaysia’s tax policy. “If a system works, don’t throw it out just because it wasn’t yours. Bring back GST — but do it right this time.” — DayakDaily
