Guan Eng says it again: Malaysia won’t go bankrupt without GST

The finance minister says the abolished consumption tax had a big impact on the lives and economic well-being of the people, especially those in the B40 group.

Finance Minister Lim Guan Eng.

KUALA LUMPUR: Finance Minister Lim Guan Eng has again defended the government’s move to abolish the goods and services tax (GST), saying the country has not gone bankrupt but has in fact survived so far.

He said although the GST was idolised by some parties who wanted a free market and feared losing foreign investors, the impact of the tax system was a burden on the people, especially those in the lower income or B40 group.

“Although the new government has abolished the GST, so far Malaysia has not become bankrupt. We can still hang on. It proves that we can survive without GST,” he said when winding up the debate on the Goods and Services Tax (Repeal) Bill 2018 in the Dewan Negara yesterday.

The bill was approved for a third reading with a majority vote before Dewan Negara president SA Vigneswaran.

Lim said many complaints were received after the GST was introduced, which showed that the tax system had a big impact on people’s lives, especially their economic well-being.

The Dewan Negara also passed the Service Tax Bill 2018 yesterday. Lim, when winding up debate on the bill, said the government had exempted school canteens from the service tax.

He added however that service providers and restaurants in universities were still subject to the tax due to various customer factors.

“If we look at Universiti Malaya or other universities, these are large establishments where clients comprise not only students, but also lecturers, professors and others.

“That’s why the Royal Malaysian Customs Department feels that they should be subject to service tax because they are already at the level of establishments, not like in schools,” he said.

The sitting also approved the Customs (Amendment) Bill 2018 to amend the Customs Act 1967, and the Free Zone (Amendment) Bill 2018 to amend the Free Zones Act 1990.

Vigneswaran then postponed the sitting of the Dewan to Aug 27. -FMT