KUALA LUMPUR – The government is studying the feasibility of reimplementing of the Goods and Services Tax (GST) or other consumption tax models.
Deputy Finance Minister II Mohd Shahar Abdullah said Putrajaya will take into account various aspects, including weaknesses in the existing Sales and Services Tax regime, as well as faults in the previous guise of Malaysia’s GST introduced 2015.
He said the study will include impacts on the economy, the cost of living, the impact of taxes on the price of goods, as well as the ability to address the shadow economy.
“The new tax should be easy to administer and not increase business costs, aside from strengthening the country's fiscal position," he said during the oral question-and-answer session at the Dewan Rakyat today.
Mohd Shahar said this in reply to a question by Wong Shu Qi (PH-Kluang) on whether the Perikatan Nasional government would reimplement the GST or the wealth tax to boost government revenue.
As for the wealth tax, he said that the government has no plans to implement it at the moment, stressing that the government will not introduce any new measures with regards to taxes if it is a public burden.
“We will look at other methods as mentioned by the finance minister during the presentation of Budget 2021, by strengthening tax compliance and empowering the multi-agency taskforce.
“If we create a new tax, it will only boost revenue, but if it is going to be a burden on the people, it will not be effective,” he said.
Meanwhile, Mohd Shahar said in terms of the nation’s economic recovery, the government remains optimistic of a 5.5% to 6.5% gross domestic product growth (GDP) in 2021.
“The GDP contracted 17.1% in the second quarter of this year but improved to -2.7% in the third quarter, this is the impact from the implementation of the stimulus (packages),” he said.
The economic stimulus packages were the PRIHATIN, PRIHATIN PKS+, PENJANA and KITA PRIHATIN, totalling RM305 billion.
“Together, we must ensure that the country's economic situation improves based on the passing of the Budget 2021, because this is the fifth step before we launch the 12th Malaysia Plan (12MP) in January 2021,” he added. – Bernama, December 10, 2020
