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Wee: New taxes due to increase in debt service charges

Publish date: Wed, 28 Feb 2024, 10:42 PM

KUALA LUMPUR: A Barisan Nasional member of parliament said the federal government is introducing new taxes and increasing taxes due to rising national debt service charges.

In his debate of the king's address in the Dewan Rakyat today, Datuk Seri Dr Wee Ka Siong said the unity government is expected to generate an additional RM3 billion in revenue this year from the increase in the Sales and Service Tax (SST) from six to eight per cent from March 1.

He said the SST increase could only cover 21 per cent of the interest incurred by the government annually, with the principal debt remaining unpaid.

"This is why the government introduced new taxes and increased taxes, including the Low-Value Goods Tax, Digital Services Tax, Capital Gains Tax and High-Value Goods Tax.

"The situation is compounded by the increase in electricity and water tariffs, as well as the monthly Indah Water charge.

"There may be more new taxes and tax increases to pay the debt service charges," said Wee, who is also MCA president.

He said it was alarming that the people would bear the brunt of the new taxes and tax increases.

He cited a report by the Finance Ministry which stated that the debt service charges had increased by 36.4 per cent from RM12.1 billion in the fourth quarter of 2022 to RM16.5 billion in the same period last year.

He said the debt service charges in the fourth quarters of 2021 and 2020 were RM10.2 billion and RM8.4 billion, respectively.

"The increase in the debt service charges is way higher than the cost of the salary increase for civil servants, pensions and all other government expenses."

Wee said there was no need for the government to wait until March 20 to make water and electricity charges exempt from the SST increase as Prime Minister Datuk Seri Anwar Ibrahim could address this immediately in his capacity as finance minister.

"I urge that the matter be urgently expedited."

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