Mustapa: Malaysia would’ve been in trouble without GST

International Trade and Industry Minister Mustapa Mohamed said Malaysia would have been in serious trouble without the Goods and Services Tax (GST).

“Without the GST, we would have been in serious trouble.

“(Globally) the price of oil and gas has come down. Our revenue from oil has come down drastically.

“Our prime minister is on record as saying that the GST has saved us from a very challenging fiscal situation.

“But people don’t like it. Awareness and education of the public (on the GST) is tough but crucial,” Mustapa said in an interview with Indian business news site Business Standard.

He said government revenue has gone up considerably since the implementation of GST and that it has taught entrepreneurs to be more disciplined about maintaining proper accounts.

Before GST, he said, many in the “informal or black” economy were not paying taxes.

“Still, some people blame everything on the GST.

“We have had the GST for two years and it is still not over yet,” he said.

GST became unpopular with the public, he said, because some businesses took advantage of the tax to hike up their prices.

However, the government has since introduced anti-profiteering measures to stop this practice, he said.

“The public wanted the government to come down hard on those who took advantage of the system.

“(With the GST) there is risk of inflation but that is just one-off,” Mustapa said.

He also conceded that the BN government may have lost some “political capital” since the implementation of GST but that it was the right thing to do in the long-run.

“Our prime minister was courageous. We could have been populist - not taken this route, but we did the right thing for the long term,” he said.

The GST was first implemented in April 2015 and has been unpopular with the rakyat as many saw it as contributing to the rising cost of living.- Mkini