Najib says GST was implemented to help the government generate revenue to mitigate the fall in the country’s oil revenue to ensure the rakyat get basic and public services, not because of 1MDB’s finances.
Prime Minister Datuk Seri Najib Tun Razak has refuted the Opposition’s claim that the Goods and Services Tax (GST) was implemented due to 1Malaysia Development Berhad’s (1MDB) finances.
“Recently, there was allegation against GST in Malaysia whereby the Opposition says that GST is because of 1MDB.
“This allegation is another attempt to gain support despite the Opposition’s understanding of the true purpose of GST being introduced,” the Prime Minister said on his blog www.najibrazak.com.
“All this while, the national income was supported by oil revenue to ensure that people get basic and public services,” he said.
Najib, who is also finance minister, said that although unpopular, the GST has helped the government generate revenue to mitigate the fall in the country’s oil revenue.
In the global oil crisis in 2014, oil prices tumbled and Malaysia suffered.
“This caused the country’s current revenue to be reduced by more than RM40bil, an amount that will cause many services to be cut.
“Recognising that this dependence of our national revenue on the oil industry was not stable, GST was needed to ensure basic services and facilities can be continued.
“To say that the GST was introduced by a failed administration is a lie because 160 countries have implemented the GST, including developed countries like Britain, France, Germany and Canada,” Najib said.
Najib pointed out that even Saudi Arabia, the world’s largest oil producer, has introduced GST.
He said the Opposition is “aware that without income sources to replace oil output, the country’s economy would be crippled and the people will suffer”.
Last Monday, PKR vice-president Nurul Izzah Anwar reportedly said at a ceramah in Sungai Acheh, Penang, that the country lacked funds because of 1MDB, resulting in Malaysians paying GST.
She said Pakatan Harapan would abolish GST by zero-rating everything if it wins the general election.
Malaysia had implemented the GST since Apr 1, 2015. Crude oil futures had traded above US$100 a barrel in 2013, before falling to about US$50 a barrel now.
Related report: Apr 26, Zero Percent GST if Pakatan in Putrajaya