THE Goods and Services Tax (GST) should be reintroduced as the country needs more revenue to sustain a robust development pace to reach developed nation status, said a prominent economist
Reacting to Budget 2025 in Parliament last Friday, Tan Sri Dr Kamal Salih supported the reintroduction of GST and said that he was surprised that there was no inclination to prepare the country for it.
"I think it would be sooner than later - the need for a comprehensive but efficient tax collection. GST falls into this category as it reduces wastage," he said.
GST is the legacy of former Prime Minister Datuk Seri Najib Tun Razak but it was rescinded almost immediately when his successor Tun Dr Mahathir Mohamed replaced it with the current sales services tax (SST) mechanism.
Some 175 nations, including developed ones, have adopted GST or its equivalent VAT.
Kamal said that the country could start with a low taxation percentage of less than six per cent before progressing, upping it in line with economic growth and prosperity levels.
But what is important, is an effective rebate system for those who may have overpaid the GST requirements, including those from small and medium enterprises and consumers.
"We need to ensure the rebates are swiftly returned to the people. If there is too much bureaucracy, it can impede the economy. This is where efficiency in the delivery system is essential," said Kamal.
He also commended plans to broaden the sales and services tax and reform fuel subsidies next year, as announced by Anwar
The 2025 budget includes a record RM 421 billion in spending, aiming to reduce the fiscal deficit to 3.8% of GDP.
To this, Kamal said ideally, the fiscal deficit should be two per cent of the GDP to rein in debt but the fact that steps are being taken to ensure efficient spending is good.
New tourism products needed
Meanwhile, tourism activists such as Ahmad Pishol Isahak lauded the allocations to promote the industry but stressed that more investments and incentives must be given to introduce new products and services in tourism.
"We need to diversify our attractions and offer more funding for entrepreneurs to tap the potential in tourism, which is a highly competitive field."
Almost every country in the world is involved in tourism, he noted.
Malaysia needs a distinctive advantage to boost the leisure sector; this includes finding ways to lower travelling costs such as airfares and reducing congestion.
For domestic tourism, Pishol said that special weekend incentives can be given to woo tourists to visit states which are not premier destinations but are eager to tap tourism.
States such as Kedah and Perak, as well as Kelantan deserve attention in this regard. - October 21, 2024.
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