The government will study the need to reintroduce the Goods and Services Tax (GST) if that is what the people want, said Prime Minister Tun Dr Mahathir Mohamad.
“If the people believe GST is better, we will study.
“We will study whether it (GST) is better than SST (the Sales and Service tax),” he told reporters today.
The Malaysian Institute of Economic Research (MIER) on Tuesday urged the government to reintroduce GST in the 2020 Budget at a lower rate of three per cent.
Its chairman Tan Sri Kamal Salih was reported to have described the GST as a tax regime that was fair to all walks of life, adding that the system had kept the government afloat when the crude oil price declined to below US$36 per barrel in 2015.
He added that he was against the idea of abolishing the GST and replacing it with SST, when the Pakatan Harapan government took over last year.
Kamal justified that no matter how one expanded the SST to different sectors or how the enforcement was done, it would still not be enough to fill whatever (income) that had been produced by GST.
However, Dr Mahathir said the decision to reintroduce GST would not be included in the 2020 Budget which would be tabled next week on October 11.
“It would be difficult to include it in the budget. Maybe later on,” he said.
GST was enforced on April 1, 2015, at a rate of six per cent but was replaced with SST starting Sept 1, 2018.
During the 14th general election, Pakatan Harapan had campaigned on the removal of the GST that rival Barisan Nasional had introduced and promptly abolished the tax after it took over the government.
After MIER’s suggestion yesterday, Federation of Malaysian Consumers Associations (Fomca) deputy chairman Mohd Yusof Abdul Rahman said it would be difficult to reintroduce the GST given continuing negative perceptions of it.
He pointed out that the previous rate of six per cent was high and had burdened the people with price hikes, especially on essential items.