The Malaysian Insight

PERIKATAN Nasional is not focusing on re-introducing the goods and services tax (GST) although it is studying various ways to generate more income, said Deputy Finance Minister II Mohd Shahar Abdullah.

“GST is not our main option as our focus is on how to reduce leakages,” said the Paya Besar MP in the Dewan Rakyat during the question-and-answer session today.

Shahar was responding to Mohamad Sabu (Kota Raja-PH) on whether the government plans to reintroduce the GST following the ratings downgrade by Fitch last week.

Mohamad also asked if the downgrade is due to political instability.

Shahar said the current economic crisis was not caused by Malaysia’s economic fundamentals.

“The downgrade from A- to BBB+ is not caused by economic factors as we are one of the most competitive countries for doing business.”

Malaysia was ranked 12th among 190 countries in the World Bank’s Doing Business 2020 Report, he said while the government is considering introducing the Fiscal Responsibility Act.

Shahar, however, did not respond to Mohamad’s question on whether the downgrade was caused by PN’s instability.

The Barisan Nasional government introduced the GST at 6% in 2015. The consumption tax, however, was poorly administered with billions owing to companies as refunds.

In 2018, the newly installed Pakatan Harapan government scrapped GST and reintroduced the sales and services tax. – December 7, 2020.