The Malaysian Insight

PUTRAJAYA will consider bringing back the abolished goods and services tax (GST) to replace the sales and services tax (SST) if it is what the people want, said Prime Minister Dr Mahathir Mohamad.

“If the people want it (GST), we will study whether it is better than the current SST,” he said after launching the Security and Public Order document in Putrajaya today.

He said if the people believe GST is better, the government will conduct the study.

Dr Mahathir, however, said it is too late to reinstate the GST at Budget 2020 that will be unveiled next week.

Earlier this week, the Malaysian Institute of Economic Research urged the government to re-introduce the GST.

Describing GST as a tax regime that is fair to all, MIER chairman Kamal Salih said tax was the system that kept the government afloat when crude oil prices declined to as low as US$36 per barrel in 2015.

“GST is a fair system, some people said it is regressive because the poor will be affected.

“But we have exclusion clauses that will protect the lower income group, or B40.”

Kamal had said while the Pakatan Harapan government abolished the GST and replaced it with the SST last year, he was one of the economists consulted who were against the idea.

“Because no matter how you expand the SST to different sectors or how the enforcement is done, it will still not be enough to fill what (income) has been produced by GST.”

The Pakatan Harapan government abolished GST immediately after assuming federal power as it was one of its election promises.

It replaced the GST with SST after giving a month-long tax break for Malaysians. – October 3, 2019.