PETALING JAYA, Oct 13 – Malaysians need to increase their income level before the government can consider reintroducing the goods and services tax (GST), FMT reported quoting Prime Minister Anwar Ibrahim on Sunday.
Speaking at the Associated Chinese Chambers of Commerce and Industry of Malaysia’s (ACCCIM) annual general meeting Sunday, Anwar said he has long recognised that GST is the most transparent and efficient tax system.
GST was introduced at 6% in 2015 under then prime minister Najib Razak. It was abolished by the former Pakatan Harapan government three years later and replaced with the SST at the same rate.
“Is GST efficient? Yes. Is it transparent? Yes. Will the government get more revenue? Yes. But who are you taxing? Everyone. The rich? Yes. The poor? Yes. (Then) I can’t (do that), Anwar said.
“My view is to give it a few years. Make sure that the threshold, the level of income is raised to a minimum of RM3,000 or RM4,000. We can gradually (introduce) this policy then.
“Countries which have implemented GST raised their level of income first. I understand this issue and have studied it for decades.
“When I was the finance minister for the first time (in the 1990s), I called it the most efficient and transparent system in terms of revenue collection.
“But I also said we needed time to strengthen the economy and stop people from using their political positions for corrupt purposes”.
The minimum wage in Malaysia is currently RM1,500.
Under the SST system, Putrajaya collected an estimated revenue of RM26.7 billion in 2020, and RM27.9 billion in 2021.
In comparison, the government collected RM44 billion from the GST in 2017.
