MP rues govt’s lost budget opportunity to reintroduce GST

 

Shah Alam MP Azli Yusof said the government should seriously consider reintroducing the consumption tax. (JAPEN pic)

PETALING JAYA: The government missed an opportunity to reintroduce the goods and services tax in the 2024 budget as part of its fiscal reforms, Shah Alam MP Azli Yusof of Pakatan Harapan told the Dewan Rakyat today.

“If the term GST makes people uncomfortable, we can rename it as value added tax (VAT) or anything else, as done by many countries around the world. A total of 170 countries use the VAT method to ensure the best revenue,” Azli said during the debate on the 2024 supply bill.

He described the consumption tax as the best taxation system to increase government revenue, prevent wastage as well as combat the black economy.

Azli said the government would be able to produce a budget surplus if the fiscal deficit was reduced by an average of 0.5% to 0.6% of gross domestic product annually over the next 10 years.

GST at 6% was introduced in 2015 by the Najib Razak government but it was scrapped by the PH government which took over in 2018 after campaigning for its abolition. The PH government reverted to the sales and service tax system.

However, in the lead-up to the 2024 budget announcement, the government had faced many calls to reintroduce GST to increase national revenue. Instead, Prime Minister Anwar Ibrahim announced an increase in the SST rate, but excluded a range of items and services, such as food and beverages and telecommunications.

Last week in Parliament, Wee Ka Siong (BN-Ayer Hitam) also suggested the government reintroduce GST as a way to reduce corporate tax. He said the abolition of GST in 2018 was a direct cause of Malaysia having one of the highest corporate tax rates in the region, making the prospect of setting up business in the country unpalatable for many foreign companies.

He also urged the government to move on from the history of GST and change the name if the government did not like it. - FMT