PETALING JAYA: Several leaders from both sides of the political divide have supported calls by economists for the unpopular Goods and Services Tax (GST) to be reimplemented to invigorate the country’s economy.
DAP veteran Dr Tan Seng Giaw noted that over 160 countries currently implement GST, or a similar tax, and none had abolished it as Malaysia did.
He pointed out that had GST remained, the collection for 2018 and 2019 would have topped the RM44 billion collected in 2017.
“In practice, if the revenue from GST was to be that high, it would be very difficult to find an alternative method that could generate that much revenue.
“And since GST was zero-rated (and later abolished), it is an uphill task to get revenue to balance the budget,” he told theSun.
Tan said the government should consider bringing back GST at a rate of between 2% and 3% before increasing it gradually.
He was responding to calls from economists for GST to be reimplemented in the coming Budget 2020 to replace the Sales and Services Tax (SST).
In 2018, the government had only managed to collect RM5.4 billion in SST from September to December, and expects to collect RM22 billion this year – half of the RM44 billion collected under GST.
Parti Pribumi Bersatu Malaysia policy and strategy bureau chief Datuk Rais Hussin Mohamed Ariff said the proposal by economists should be considered by the government. However, he said the return of GST was highly unlikely considering its abolition was one of Pakatan Harapan’s (PH) main election promises.
“You cannot flip-flop on major policies like this,” said Rais, who was a key figure in the drafting of PH’s manifesto.
Umno secretary-general Tan Sri Annuar Musa said the government has little choice but to bring back GST, going by the current financial performance of the ruling government, but said he does not expect such a move to materialise.
“In the coming budget, there is not much that can be done to help improve the economy if they continue to be in denial of the economic fundamentals that was built and arranged by the previous government,” he said.
MCA president Datuk Seri Wee Ka Siong said it is incumbent on PH to bring back GST considering the government’s promise that SST would lower prices of goods and services has not been fulfilled.
He said he would not be surprised if the PH administration eventually reverts to GST in the years to come, due to the revenue potential.
Meanwhile, Federation of Malaysian Consumers Associations secretary-general Datuk Paul Selvaraj said such a move would be counterproductive, and all quarters should move forward with the government’s decision on SST.
“GST only increases the cost of living, and reimplementing it will be an added burden to the rakyat.”