KUALA LUMPUR – The implementation and effects of the goods and services tax (GST) are being studied before a decision is made to revive it, said Prime Minister Datuk Ismail Sabri Yaakob.
“Many people immediately jumped when I said I don’t discount the possibility of bringing back GST. But I said it needs to be studied first, especially the pros and cons.
“I did not announce that the GST will be implemented, but to study the matter as the government found a RM30 billion drop in annual revenue after reverting to the SST (sales and services tax),” he told reporters after launching the World Environmental Day celebrations at Taman Tugu here.
“If we feel that SST is no longer suitable, what are we replacing it with? What we decide has to be accepted, not rejected by the people.
“We will take into account whether GST will bring about price increase or when is the right time. So, don’t worry, when the time comes, we will make an announcement,” he was quoted as saying by Bernama.
In a recent interview with Nikkei Asia, the prime minister said the government was mulling the reintroduction of GST but conceded that efforts to increase public awareness of the tax must first be intensified before it can be implemented.
“We lost RM20 billion in annual revenue when we abolished the GST and replaced it with the old SST. No country in the world has reverted back from GST to SST, except for Malaysia,” he said, commenting on the U-turn taken by the Pakatan Harapan (PH) government after it won federal power in May 2018.
The Federation of Malaysian Manufacturers then welcomed the reintroduction of GST as it is a fairer and more transparent tax regime compared to the SST.
Its president Tan Sri Soh Thian Lai suggested that the implementation of the GST be done at a 4% rate while corporate tax be reduced to 20%.
Prominent banker Tan Sri Nazir Razak recently said the GST should be reinstated and PH administration erred when it removed GST after its 2018 election victory.
In March, the Finance Ministry had said the government was still studying the suitability of implementing the GST, along with the usage of other taxation models.
The GST was introduced by the Barisan Nasional government in April 2015 at a standard rate of 6%.
The current sales tax is between 5% and 10% while services are taxed at 6%. – The Vibes, June 5, 2022
