Bringing back GST can help those hit by pandemic, says Najib

 

Najib Razak cites Singapore, Indonesia, Bahrain and Saudi Arabia as countries that have raised the consumption tax rates despite being in the middle of a pandemic. (Bernama pic)

PETALING JAYA: Bringing back the goods and services tax (GST) will be one way of helping those who are financially struggling because of the pandemic, Najib Razak said today.

Taking to Facebook, the former prime minister made his case by citing the example of countries that raised their consumption tax rates during the pandemic.

He pointed to how Singapore, Indonesia, Bahrain and Saudi Arabia raised their GST or value added tax (VAT) rates, saying it had helped their governments to provide greater financial assistance to the people.

“The pandemic affected the various economic sectors differently, with some showing better growth than others.

“Hence, the money collected following the increase in GST for sectors that are performing better could then be distributed directly to the public who are struggling most,” he said.

Najib said that on the individual level, those whose income was not negatively impacted by the pandemic were also spending more, so they would be paying more tax based on the GST imposed.

According to him, the export, agriculture and healthcare products sectors had benefited from the health crisis and shown greater growth compared with pre-pandemic times, and those working within these sectors could afford an increase in the GST.

There had been calls from certain economists and politicians to reintroduce the GST amid concerns that Malaysia’s debt-to-GDP ratio would increase, with no stable inflows and high outflows of government expenditure.

However, finance minister Tengku Zafrul Aziz said last year that Putrajaya would not introduce any new tax schemes for now despite seeking ways to broaden its revenue post-pandemic.

A 6% GST had been introduced in 2015 but was abolished by the former Pakatan Harapan government and replaced with the current sales and services tax (SST) system in 2018. - FMT