FINANCE Minister II Datuk Seri Amir Hamzah Azizan said the government has no plans to revive the Goods and Services Tax (GST) which was abolished in 2018.

However, he reiterated the government’s commitment to a progressive approach with focus on targeted subsidies and taxation, NST reported.

“It is not the right time now to reintroduce it, especially for low-income earners. The government will focus on improving the existing tax system and introducing taxation that does not affect vulnerable groups before considering new taxes like GST,” he was quoted as saying to the Dewan Rakyat on Tuesday (March 5).

“This approach aims to increase government revenue gradually by expanding the tax base to those with a higher ability to pay.”

Amir noted that despite the fact that the inflation rate averaged 2.5% in 2023, it was nearly 5% for food and beverages.

“This category is more keenly felt by the rakyat and this is one of the reasons why the food tax rate is maintained at 6%,” he added.

Amir was responding to a query from Bukit Gantang MP Datuk Syed Abu Hussin Hafiz Syed Abdul Fasal during the ministers question time on whether the government was ready to re-implement GST as over 175 countries are adopting this regime.

He further said the government will ensure that any tax measures taken do not directly impact vulnerable groups and that their welfare will remain protected.

Meanwhile, Putrajaya MP Datuk Seri Radzi Jidin expressed concerns about the impact of the Sales and Service Tax (SST) increase and its expansion compared to the previous implementation of the GST especially in terms of revenue and national income.

Responding to this, Amir stated that the government was trying to reduce the burden on the entire population, in particular vulnerable groups.

Elaborating, he said regarding the logistics tax imposed, the government’s strategy aimed to reduce the burden by not levying service taxes in areas where business-to-business transactions occur.

“For example, we do not impose service taxes on exports, ensuring that we do not hinder the current economy,” he added.

In terms of government actions, Amir explained that the government looks at where it can provide tax relief especially for vulnerable groups as not all citizens have the same economic basis.

“In terms of differences between GST and SST, what is important is the government’s ability to use the tools available now to address immediate concerns and find ways to reduce inefficiencies in the system. Subsidy reform is essential for the government at this time,” he said. - March 5, 2024 

https://focusmalaysia.my/report-govt-has-no-plans-to-reintroduce-gst-dewan-rakyat-told/