THE Government is not looking at reintroducing the Goods and Services Tax (GST) for now as it was looking at measures on how to rejuvenate the economy and help people during the pandemic.
Speaking at the Dewan Rakyat, Deputy Finance Minister Mohd Shahar Abdullah said: “We are looking at setting up a multi-agency taskforce to cut costs, expand revenue base and improve governance. Let’s look into those aspect first.”
On Nov 23, Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz said that the Government has set up a committee to study ways to boost revenue, including the possibility of reintroducing the GST.
“Timing is also important, especially when introducing any new taxes, so as not to disrupt the economic recovery process slated next year,” he was reported saying.
Several economists told FocusM on Oct 20 that it will be good for the Government to bring back the GST but cautioned on the timing as many have lost jobs and suffered salary deduction due to the economic downturn, triggered by the COVID-19 pandemic.
Former Prime Minister Datuk Seri Najib Tun Razak introduced the new tax regime back in 2015 in a move to boost tax revenue and reduce dependency on profits from fossil fuel.
However, the Pakatan Harapan Government abolished GST in 2018 as part of its election promise made to the voters.
Meanwhile, Shahar told the Dewan Rakyat that the downgrading of Malaysia’s debt rating from “A-” to “BBB+” by Fitch Ratings was not caused by “internal factors”.
Last week, Fitch downgraded Malaysia’s sovereign rating with an improved outlook from negative to stable.
The ratings agency expects Malaysia’s gross domestic product (GDP) to contract by 6.1% this year, before rebounding by 6.7% next year. – Dec 7, 2020.
