KUALA LUMPUR, March 24 (Bernama) -- The government is still undertaking a study on 255 products to determine if all should be subject to or exempted from the Goods and Services Tax (GST) to be implemented in April next year.
Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah also said the government had decided to place 689 products under the GST which will replace the Sales and Services Tax(SST).
"A further 273 products which were previously taxed at 10 per cent will only have six per cent levied when the GST is implemented," he added.
He said this during the winding up of the motion of thanks on the Royal address in the Dewan Rakyat here today.
Ahmad Husni said the government was always undertaking indepth studies on household income and the impact of the GST on it when implemented at the rate of six per cent instead of 16 under the SST.
On Malaysia Airlines (MAS) which had posted a loss of RM1.174 billion last year, he said the aviation industry was very challenging.
"In terms of passengers, there was a 17 per cent increase but 10 per cent drop in revenue and there is a clash here.
"This is because the main competitors, specifically Gulf Air, is offering lower fares, so MAS has to drop its own fares too," he added.
Husni said the petrol price hike also demolished revenue and apart from MAS, Thai Airways and Korean Airlines too faced losses.
"MAS purchases fuel using US dollars and the strengthening of the greenback is forcing us to pay more.
"MAS is in the process of replacing its fleet and that is expected to reduce costs between 20 to 30 per cent in fuel usage. The airline is confident that its financial position will be better next year," he added.