A report tabled by the Ministry of Finance (MoF) in the Dewan Rakyat yesterday informed that since their introduction and implementation last year, the government has collected RM476.1 million from the the Low-Value Goods Tax (LVG) and RM1.6 billion from the Digital Services Tax (DST). These funds should be returned to the rakyat through various methods.

If not, MCA urges the government to clarify how the revenue from these two new taxes will be used to benefit the masses, especially at a time when public grievances fester over the high prices of goods and the cost of living.

Recently reports surfaced that the cost of school supplies has reached RM200, leaving Deputy Minister of Domestic Trade and Cost of Living YB Fuziah Salleh "shocked". The price of coconut milk having reached RM20 per kilogramme has also gone viral in social media.

It needs to be highlighted that the government's decision to withdraw diesel subsidies last year led to a climb transportation costs, causing school bus operators to bemoan and express their intention to raise fares. This was despite the government's assurance that the rationalisation of subsidies would not burden the majority of the public.

Additionally, with the increase in electricity tariffs which supposedly "does not affect 85% of domestic account holders," the MCA is concerned that these escalating operational costs will eventually be passed on to ordinary consumers.

Naturally, citizens feel frustrated when the government introduces policies that burden them, especially in view of the rising cost of living that is becoming increasingly difficult to shoulder. Therefore, for the purposes of transparency and prudent financial management, the government ought to provide a detailed explanation on how the revenue from these new taxes will be used to alleviate the financial burden of people, to ensure that the public continues to have confidence in the government.

Simultaneously, the government should consider reintroducing the GST, possibly at a lower rate of 3-4% at the initial stage. Members of the public, the business community, industry players, and even members of the ruling coalition have acknowledged that the GST system is fair, more transparent and efficient.

Datuk Ir. Lawrence Low
MCA Vice President
MCA Economic and SME Affairs Committee Chairman

19 February 2025

-MCA Comm-