Bersama unveils shadow budget, moots 5% GST, cash aid overhaul

 The party says a 5% GST and targeted assistance will strengthen social protection while reducing fiscal deficit over the next decade.

A GST capped at 5% could generate about RM76.1 billion in revenue in 2027 compared with the RM59.4 billion expected to be collected through the 6% SST in 2026, said Bersama. (Bernama pic)

PETALING JAYA:

Bersama has unveiled its shadow federal budget, which includes the reintroduction of the goods and services tax (GST) capped at a 5% rate and the abolition of several cash aid schemes in favour of more targeted monthly assistance.

The party said capping the GST at 5% for the next 10 years would provide certainty for households and businesses, while containing the impact of the tax scheme on future inflation.

“Based on Bersama’s estimates, a 5% GST could generate approximately RM76.1 billion in revenue in 2027, or 3.3% of the GDP, compared with the RM59.4 billion expected to be collected through the (6%) sales and service tax in 2026.

“This would generate additional revenue of approximately RM16.7 billion,” the party said in its shadow budget.

Bersama proposed scrapping the Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA) schemes and replacing them with a distribution of RM200 a month to the bottom 60% of households (B60).

It also proposed that every Malaysian child under 18 receive RM50 a month, capped at five children per household, for a maximum benefit of RM250 a month or RM3,000 a year per household.

Bersama also said the government should study the possibility of implementing a retail electronic payment tax (REPT) from 2027 to 2029.

“No REPT will be imposed during the development period. Subject to the feasibility of the framework, REPT could be introduced in 2030 at a rate of 0.5%,” it said.

“REPT at a rate of 0.5% on this base could potentially generate about RM9.1 billion a year, before taking into account exemptions and behavioural changes.”

It said these measures could, among others, help Malaysia eliminate its fiscal deficit and record its first budget surplus since 1997 by 2035. - FMT