[UPDATED] Pakatan says no to Ismail Sabri’s GST proposal

KUALA LUMPUR – The Pakatan Harapan (PH) presidential council has rejected Prime Minister Datuk Seri Ismail Sabri Yaakob’s proposal to reintroduce the goods and services tax (GST).

In a statement today, the council said the move would cause immense hardships for the people as it would lead to a drastic increase in the cost of goods.

It said this was compounded by supply-chain issues and stagnant wages.

The council added that it is illogical for the government to consider collecting additional taxes from the people without first proving that the nation’s governance has improved.

“There is no point in collecting more taxes if the people’s money is eventually wasted on corruption and cronyism,” it said, referencing Malaysia’s position as number 62 in the Transparency International World Corruption Index.

It also reminded Ismail Sabri that a majority of the population had opposed the GST during the previous general elections.

Despite criticism and protests by various quarters, the controversial tax system was introduced under the Barisan Nasional government in 2015 at a rate of 6%, a move criticised by the opposition during its election campaigns.

After taking over Putrajaya in May 2018, PH had zero-rated the tax before abolishing and replacing it with the sales and services tax (SST).

On the possible return of the GST, Ismail Sabri recently told Nikkei Asia that no other nation besides Malaysia has reverted from GST to SST.

The prime minister said the nation lost RM20 billion in annual revenue after the GST was abolished and replaced with the SST.

He added that efforts to increase awareness of the tax form among the public must first be intensified before it can be implemented. 

Previously, the Finance Ministry said the government was still studying the suitability of implementing the GST, along with the usage of other taxation models.

“The study being carried out also covers the impact on the economy, cost of living, cost of goods, as well as ability to address the shadow economy (or black market),” the ministry said in a written statement published on the Parliament website on March 21. – The Vibes, June 1, 2022