KUALA LUMPUR: The government should collaborate with industry players to develop a clear list of products for the expanded Sales and Service Tax (SST) to avoid placing unnecessary burdens on all parties.
Restaurant and Bistro Owners Association vice-president Jeremy Lim said there was a need for the government to clarify the criteria for identifying "premium" products to prevent confusion and chaos.
"They can't just say salmon or avocado. We have small local producers cultivating avocados — does that mean their products will be taxed? It's also not feasible to say that all imported items will fall under the SST, considering we import about 80 per cent of our products, including rice.
"The government needs to establish clear definitions," he said, warning that failing to do so could lead to further confusion.
N.V. Subbarow, a senior education officer at the Consumers' Association of Penang (CAP), echoed this sentiment, expressing concern that misidentifying products subject to SST could disproportionately impact consumers in the B40 income group.
"Salmon is a common food for Malaysians and not overly expensive, so taxing it is disappointing. Avocado, while nutritious, is typically consumed by wealthier individuals, so that's less of an issue.
"However, we need a clear definition of products that will be taxed soon. As it stands, the SST will burden the B40," he said.
Mydin Mohamed Holdings Bhd managing director Datuk Dr Ameer Ali urged the government to be clear and cautious in identifying products for the expanded SST, as it could affect low-income consumers' access to healthy food options.
"Avocado and salmon are healthy foods, not premium items. By taxing what you classify as premium, you make healthier options less affordable for the poor. For instance, basmati rice is not exclusive to the rich; it's healthy. However, the higher tax makes it more expensive for low-income consumers," he said.
He believes the government should consider reintroducing a Goods and Services Tax (GST), which he argues will be a fairer consumption tax for everyone.
Today, the government announced a progressive expansion of SST, set to take effect on May 1 next year.
In tabling the 2025 Budget (Belanjawan 2025), Prime Minister Datuk Seri Anwar Ibrahim said that the SST would not apply to basic food items, but premium products such as salmon and avocado would be included in the SST product list.