PETALING JAYA, Oct 13 — The federal government said today it would only consider reintroducing the Goods and Services Tax (GST) once Malaysians’ income levels rise to a comfortable threshold.
Even as he acknowledged GST as the most transparent and efficient tax system, Prime Minister Datuk Seri Anwar Ibrahim said “to give it some time” instead, as re-introducing it now would mean taxing even the poor.
“Is GST efficient? Yes. Is it transparent? Yes. Will the government get more revenue? Yes. But who are you taxing? Everyone. The rich? Yes. The poor? Yes. I can’t do that,” he said, describing the approach as contrary to his political philosophy and conscience.
“So what is my view? My view is to give it some time, a few years and ensure that the income threshold increases,” he added in his speech at the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) 78th AGM at One World Hotel here.
Anwar said he has “studied the issue for decades”, stating that he first talked about GST when he was then finance minister in the 90s.
“And what was my statement? The most efficient, transparent system that will be most advantageous of the government in terms of revenue collection.
“But what was my answer then in the 1990’s? Give some time. Push the economy forward,” he said.
For Malaysia, that would mean raising the minimum income level to between RM3,000 to RM4,000 before the government could gradually make adjustments to this policy, Anwar added.
He also said corruption and misuse of political office in Malaysia must be addressed before the introduction of GST, reiterating his commitment to plugging the leakages in government revenue from corruptive mismanagement.
The minimum wage in Malaysia is currently RM1,500.
The GST was introduced at 6 per cent in 2015 under then prime minister Datuk Seri Najib Razak.
It was abolished by the former Pakatan Harapan government three years later and replaced with the Sales and Services Tax at the same rate.
