Written by Stan Lee, Politics Now!
KUALA LUMPUR (Politics Now!) - What has happened to the 'caring and sharing' government promised by Prime Minister Anwar Ibrahim's government? Now even the sick, the elderly and the poor are being burdened with a new tax that punishes all who resort to traditional and complementary medicine to heal their ills.
According to newly-minted deputy finance minister Lim Hui Ying, the daughter of DAP supremo Lim Kit Siang, all forms of alternative medicine services regulated by the Traditional and Complementary Medicine Act 2016 are subject to the six percent sales and service tax (SST).
She told told Malaysiakini that the law covers traditional Malay medicine, traditional Chinese medicine, traditional Indian medicine, Islamic medicine, homeopathy, and complementary therapies.
This is a major change and has raised an immediate hue and cry as such medical services, regulated under the Medical Act 1971, were previously exempt from SST because they were recognized as a public service.
"The MCA urges the government to reconsider the tax on traditional and complementary medicine (T&CM) as it would only worsen the financial strain on patients, especially those from vulnerable communities," protested Tan Teik Cheng, the vice president of ally party MCA, in a statement to the media.
"Even the implementation of the Goods and Services Tax (GST) during the Barisan Nasional’s administration exempted T&CM services from taxation. The latest tax raises questions into the rationale behind the apparent shift by the Malaysia Madani government to now target patients as it enters the second year of administration."
"While acknowledging the need for revenue, the decision to raise the Sales and Service Tax (SST) from 6% to 8% in 2024 has already increased the burden on the lives of ordinary citizens. Extending the taxation to cover T&CM services unfairly disadvantages patients who rely on it for affordable healthcare, especially those with limited means."
HEALTH BOMBSHELL
The bombshell was dropped by the Health Ministry’s Traditional and Complementary Medicine division after it reminded practitioners to collect the six percent SST if they met the sales threshold of RM500,000.
The circular also reminded practitioners of the voluntary disclosure programme for those with back taxes since the SST was reintroduced in 2018, and that the SST will increase to eight percent starting March 2024.
According to Hui Ying, who claimed she was arranging meetings for disgruntled purveyors to meet with the finance ministry, the SST only applied to medical services and not products offered by alternative medicine providers.
“In the past few years, most (traditional Chinese medicine) practitioners did not reach the RM500,000 turnover threshold, so they were not affected,” she said.
To reach the threshold, if a provider reaches RM500,000 revenue over 12 consecutive months, they must report their status to the tax authorities by the subsequent month. Following this, they will be required to collect SST, she added.
TAX-HUNGRY GOVERNMENT?
The scanty explanations from both Anwar's health and finance ministries were immediately panned. Anwar is also the Minister of Finance apart from being prime minister, while Dr Dzulkefly Ahmad heads the Health Ministry.
"According to my understanding, Western medicine and modern medicine are not subject to any taxation, so why are T&CM services subject to taxes? This is clearly unfair and unreasonable to T&CM practitioners and patients," said MCA's Tan.
"The MCA implores the government to swiftly reverse this decision. In the aftermath of the pandemic, people are still doing their best to rebuild their lives and the government has yet to solve macro issues such as rising prices and supply shortages. So, at the very least, the government should show some compassion for the sickly, and treat all forms of healthcare equally, whether they are traditional or Western."
"The MCA has repeatedly proposed that the government reinstate the GST system and reduce the rate from 6% to 4%. This would reduce the burden on the people and still increase government revenue. Consumption-based taxation is a proven method to increase government revenue, as evidenced by the fact that it is used in over 170 countries around the world. However, the Unity Government would apparently rather be known as a tax-hungry government than adopt the MCA's proposal."
"Using the 10% sales tax on imported low-value goods set to be implemented this approaching January as a reference, it is generally estimated that only RM200 million would be generated in annual revenue for the government. The amount of revenue collected from the 8% SST on T&CM is believed to be considerably less than RM200 million. What logic does this decision, which is both burdensome and ineffective in increasing government revenue, ultimately rest upon?"
Written by Stan Lee, Politics Now!
Politics Now!
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