The government will not introduce GST within this year!
According to a message from Finance Minister Tengku Zafrul, the government is working on the possibility of re-implementing the consumption tax (GST), which is not expected to be introduced within this year as the government needs to obtain parliamentary approval before implementing any new tax system.
Zafrul noted that the government intends to reintroduce the GST and make improvements in the process and efficiency of tax refunds. The government will make improvements in both tax and non-tax items and improve the skill level of government officials and the overall governance of the GST.
With 175 out of 193 countries or 90 percent of countries implementing GST, the tax system is more efficient, more transparent and able to prevent revenue leakage.
According to Zafrul, the country’s total national tax revenue in 2021 will be 15.1 percent of gross domestic product (GDP), compared to 18.9 percent in Singapore, 17.7 percent in Thailand and 15.5 percent in the Philippines. This data shows that our tax system is not able to redistribute wealth effectively.
In addition, Zafrul also revealed that the government can afford to continue providing fuel subsidies to the people despite the high global price of crude oil. The government’s fuel subsidy for this year is expected to reach RM30 billion, while the fuel subsidy for a single month in May has already reached RM5 billion.
