13th June 2022 - 2 min read
Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz has said that the government will make several improvements to the Goods and Services Tax (GST) if it is reintroduced.
According to Tengku Zafrul, the upgrades to the GST will include improving the efficiency of the tax refund process, as well as devising a better mechanism to classify taxable and non-taxable goods to avoid any confusion among the people. Additionally, the government will seek to enhance the relevant skills of government officials involved, and increase tax compliance by businesses.
That said, Tengku Zafrul noted that it may be too early for the government to implement the GST by this year, as the country’s economy needs to be on a stable footing first. “Any new taxation system would also need to be approved in Parliament, and if taken into account the need to engage with the people, as well as to improve the existing system, it is unlikely that the GST will be implemented this year,” he elaborated.
Additionally, the finance minister highlighted that 175 countries – equivalent to about 90% of countries in the world – have adopted a consumption tax or value-added tax (similar to the GST). This is likely attributed to the taxation model’s characteristics as being more efficient and transparent, thereby deterring revenue collection leakage.
Late last month, Prime Minister Datuk Seri Ismail Sabri Yaakob had stated that the government is keen to reimplement the GST, and is in the process of evaluating the proposal. He also said that the government will aim for a reasonable GST rate that will be beneficial for all parties if the taxation model is reintroduced.
(Source: The Edge Markets)
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