KUALA LUMPUR (July 16): The time is not right to reinstate the goods and services tax (GST), as the lower-income group is still struggling with the cost of living, said Finance Minister II Datuk Seri Amir Hamzah Azizan.

The government adopts a progressive approach to fiscal reform, focusing on targeted subsidies and taxation, Amir noted, adding that the government has no plans to implement the GST yet, as it is a broad-based consumption tax.

"The government will continue to prioritise improving the existing tax system, and introducing taxes that do not affect the vulnerable, before assessing the need to introduce new consumption taxes such as the GST," Amir told the Dewan Rakyat on Tuesday during the minister's question time.

Any changes to the consumption-based taxation system, like reinstating the GST, must ensure that the tax is progressive, easy to administer, does not harm the cost of living or economic growth, and generates sustainable revenue for the government, Amir said.

The GST was first implemented in Malaysia on April 1, 2015, at 6%. The tax was suspended on June 1, 2018, and finally abolished and replaced by the sales and service tax (SST) on Sept 1, 2018, by the Pakatan Harapan government.

Currently, the SST stands at 6%, with the rate for selected services increased to 8% since March 1 this year.

Meanwhile, Amir said that the Ministry of Finance had collected additional tax declarations of RM741.6 million under the Special Voluntary Disclosure Programme (SVDP) 2.0, which ran from June 6, 2023 to May 31, 2024.

Of the RM741.6 million, RM512.6 million was collected by the Inland Revenue Board from tax assessments, with 141,406 applications approved, involving RM1.29 billion in undeclared taxes. The remaining RM229 million was collected by the Royal Malaysian Customs Department, with 1,542 applications approved.

"Tax revenue collected will go into the consolidated fund for financing national expenses, which are approved by Parliament through the annual budget, including public development projects," Amir added.

He noted that the government does not plan to extend the SVDP 2.0 programme, as the one-year period was sufficient for taxpayers to report income or tax liabilities for past sales or service transactions. 

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