MALAYSIANS are unprepared to take on the burden of the Goods and Services Tax (GST) just yet, said Deputy Finance Minister II Steven Sim Chee Keong.
According to the Bukit Mertajam MP, GST has the potential of crippling the household financial stability of younger families, which is why the controversial tax would not be implemented anytime soon.
“Those affected the most will be single-parent families, female-headed households and young parents. Many of them are still recovering financially from multiple crises, (so) this is not the right time to do GST,” he was quoted as saying during the National Economic Forum 2023 in Kuala Lumpur Convention Centre yesterday (May 18).
According to Sim, the lower income group would pay more tax as a ratio of their income compared with the higher income group, based on a study conducted by the Penang Institute in 2015.
He said greater fiscal discipline and a focus on ensuring the growth of businesses would be the government’s fiscal strategy going forward.
“The first priority is ensuring there is sustainable growth momentum in our economy, whether it is more investments or opportunities for foreign and local businesses,” he was reported as saying by the English daily.
“Once businesses are making money, then we will focus on implementing more efficient and progressive taxation so that the benefits can be shared among the people.”
Sim also said once the country’s revenue has increased, the government will focus on greater fiscal discipline to ensure taxpayer money is spent more prudently and transparently to prevent any corruption, leakages or wastages.
He said Malaysia’s economic growth hit 5.6% in the first quarter of 2023 and it surpassed a few of its regional neighbours.
“We surpassed the economic growth of Indonesia (5%), Vietnam (3.2%), China (4.5%) and Singapore (0.1%),” he acknowledged.
On the demand side, Sim said growth was driven by private sector expenditure following continued improvement in the labour market as well as public investment in various infrastructure projects.
Meanwhile, there was commendable expansion on the supply side, with the services and manufacturing sectors recording 7.3% and 3.2% growth respectively.
Sim said this meant the nation’s economy had recovered to pre-crisis levels when seasonally adjusted. – May 19, 2023
Main pic credit: Bernama
