Parliament is in session and although prime minister Datuk Seri Anwar Ibrahim is not in the Dewan Rakyat, he has been giving written replies to questions by MPs. On the reintroduction of the Goods and Services Tax (GST), Anwar, who is also the finance minister, said that there are no plans in ‘the short and medium term’.
In a response to Tanjung Karang MP Datuk Zulkafperi Hanafi, he said that any change in tax policy will take into account the impact on cost of living of the rakyat.
“The government has yet to revive the GST. Any changes to tax policy will have to take into account the impact on the economy and the cost of living of the people. Therefore, the government will continue to monitor the current economic condition and consider fiscal measures which are suitable with short and medium term,” the Tambun MP said, reported by The Star.
While many experts have called for the reintroduction of GST to boost government revenue, and some politicians have acknowledged that GST is a better system than SST, the Anwar-led ‘unity government’ has so far resisted the calls, focusing instead on subsidy rationalisation and other ‘smaller’ taxes such as capital gains tax and luxury goods tax.
In the recently tabled Budget 2024, Anwar announced plans to raise SST from 6% to 8%, but exempting F&B and telecommunications. In March, the PM said that Malaysia is not ready for another implementation of GST.
GST replaced SST in April 2015, but was then scrapped in favour of bringing back SST in September 2018 when Pakatan Harapan became the government. We’ve covered the impact of GST on the automotive industry and car prices in the past, which is a good read to understand the mechanics of both taxation systems.
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