Key Points
- Malaysian government considers reintroduction of GST.
- The government suffered a loss of RM20 billion after the elimination of GST.
- Businesses show discomfort towards the possibility of facing GST.
The Malaysian Prime Minister, Ismail Sabri, revealed the government’s interest to reintroduce the Goods and Services Tax (GST). The Prime Minister also noted how GST remains unpopular among businesses. However, Malaysia incurred a loss of around RM20 billion ( US4.57 billion) after the elimination of GST.
Former Prime Minister, Najib Razak, imposed GST at 6% in place of Sales and Services Tax (SST). GST held pressing concerns in 14th Malaysian General Election. Here Pakatan Harapan swore to abolish GST, if it came to power. Hence, SST replaced GST in June 2018. SST remained in place even after Pakatan Harapan government fell in March 2020.
Malaysia is in the process of recovering from the drawbacks of the pandemic. Hence, the government constantly seeks to improve federal revenue. According to suggestions, GST may be a potential tool to improve revenue. Businesses of the country feel otherwise.
“Reintroducing GST has the potential to increase the price of goods drastically. If added with supply chain problems and stagnant wages, the people will face terrible pressure,“stated a statement issued by PH on Jun 1.
According to the Prime Minister, Putrajaya is currently studying the possibility of reintroducing GST. The government is yet to take a decision about the implementation. However, the Malaysian government proclaimed their decision to weigh the positive and negative aspects of reintroducing GST.
Reference,
https://www.channelnewsasia.com/asia
