PUTRAJAYA – The government is still studying all tax systems in the world, including whether or not to reintroduce the goods and services tax (GST) in the country.
Finance Minister Datuk Seri Tengku Zafrul Tengku Abdul Aziz said 175 countries had introduced their own GST as it contributes to the countries’ gross domestic product, and government tax revenue would be relatively low without the GST.
Speaking to reporters after attending an Aidilfitri open house organised by Putrajaya Media Club here today, Tengku Zafrul said the process to reintroduce the tax had taken quite some time as it had been abolished before.
“If the study found that the GST benefits are clear, we will take it to the cabinet. The final decision is not for the government to make, it’s for the Parliament,” he said.
Tengku Zafrul said the fastest the tax could be reintroduced is about nine months after it gets the green light from Parliament.
The GST of 6% was introduced in 2015 before it was abolished in 2018 by the then ruling Pakatan Harapan government.
The finance minister said the study is now at the engagement stage as one of the issues was to ascertain a fair rate of 3% to 4% or 7% to 8%, other than looking for an alternative to improve the existing sales and services tax, which has been rendered inefficient and has caused many countries to introduce their own GST.
When asked about the fair rate for the GST, Tengku Zafrul said, whatever it is set at, it should be able to generate a higher revenue than the existing tax system.
He said some countries had even imposed a higher rate as they were able to grant many exemptions, such as in Saudi Arabia, which imposed 15% GST due to the high revenue from higher oil prices.
“There should be a study on the fair rate so as to generate revenue for the country’s development, while at the same time ensuring that it will not burden the people and the business community,” he said. – Bernama, June 8, 2022
