KUALA LUMPUR, Nov 22 — Deputy Finance Minister II Steven Sim has reportedly said that Putrajaya will only consider “other taxes” like Goods and Services Tax (GST) only after exhausting all available avenues to bolster the country’s fund.
He pointed out that taxation is not the only means to raise additional revenue, as the government is now seeking to manage its spending by focusing on targeted subsidies and minimising leakages.
“Instead of making the B40 and M40 pay more tax, [the government] said let’s deal with efficiency [by asking ourselves] how we can manage our resources and spend more efficiently,” he told Free Malaysia Today.
“There are still many other avenues [available to increase] government revenue. We do not start with [taxing] the people. We start with dealing with how the government is managing [its] spending.
He also said the Inland Revenue Board will introduce e-invoicing to minimise tax evasion, and other anti-corruption measures such as requiring open tenders.
“Let’s fix these things and get more money out of this, and at the same time, we adjust the tax rate to increase a bit of revenue.
“And once this has been exhausted, then we will consider [other taxes] and the discussion of GST will come,” he was quoted as saying.
In contrast, Sim said the reintroduction of GST will give rise to prices as it covers about 80 per cent of services as compared to sales and tax (SST), which is only about 41 per cent of services.
He added this is not the right time to implement the GST as it will only end up burdening the people, since the broader based tax would cover more products and services.
“Perhaps in the future, this discussion can come up again,” he was quoted as saying.
In 2015, former prime minister Datuk Seri Najib Razak introduced a six per cent GST, but it was latter abolished by former Pakatan Harapan government and replaced with the current six per cent SST system in 2018.
When unveiling the 2024 budget on October 13, Prime Minister Datuk Seri Anwar Ibrahim said the SST rate will increase to 8 per cent, with food and beverages and telecommunication exempt from the hike.
