KUALA LUMPUR: The Sales and Service Tax (SST) delivers a quicker fiscal impact compared to the Goods and Services Tax (GST), the Dewan Rakyat was told today.

As such, Deputy Finance Minister Lim Hui Ying said the government has no plans to implement GST, which was abolished in 2018.

"Furthermore, right now we are focusing on the implementation of the subsidy rationalisation.

"As such, the implementation of GST will be considered when there is a suitable economic environment, especially taking into account the aspect of the impact of inflation from the subsidy rationalisation," she said, in response to Kamal Ashaari (PN-Kuala Krau).

Kamal wanted to know if the government intends to reintroduce GST, which is a better taxation system than SST.

Lim said the government will continue to prioritise improving the existing tax system and introducing taxation that does not impact vulnerable groups, before assessing the need to introduce new consumption taxes such as GST.

"Any policy changes to the consumption-based taxation system such as the re-implementation of GST will be scrutinised to ensure that it is progressive, easy to administer, does not have a negative impact on the cost of living and economic growth and at the same time can generate sustainable results for the government."

Meanwhile, Lim said to maintain strong revenue collection, efforts towards strengthening tax governance and administration, increasing taxpayers' awareness of their responsibility to pay taxes in addition to increasing enforcement actions to curb tax evasion will also continue to be implemented.

"In 2023, the tax collection contributed around RM229 billion or 72.8 per cent of the government's revenue of RM315 billion.

"The government's subsidies, incentives and assistance is around RM80 billion or 19.7 per cent of the total government expenditure of RM406 billion.

"This clearly shows that these two components have a significant relationship with the country's fiscal position.

"Therefore, it is appropriate to change Malaysia's fiscal policy to focus on these two first to take advantage of the country's stable fiscal position at this time," she said.

She said the diesel subsidy rationalisation, which commenced on June 10, is expected to provide savings of RM4 billion yearly to the government.

"This, subsequently achieves the set objectives, including strengthening the country's fiscal and reducing the leakage of government aid."

https://www.nst.com.my/news/nation/2024/07/1078136/sst-delivers-quicker-fiscal-impact-says-deputy-finance-minister