PM: Government Requires In-Depth Study On Reintroduction Of GST

(Image: Bernama)
(Image: Bernama)

The government will study the proposal by various parties – including industry players, academicians, and members of the public – to reintroduce the goods and services tax (GST), said Prime Minister Tan Sri Muhyiddin Yassin.

Muhyiddin added that it is the government’s responsibility to be meticulous in assessing the effectiveness of the GST in comparison to the sales and service tax (SST) that is currently implemented in Malaysia, as well the value-added consumption tax (VAT) in various other countries.

To briefly explain, the GST is a multi-stage tax system, which means that it is imposed on each level of distributions (such as the manufacturers, wholesalers, retailers, and customers). Meanwhile, the SST is a single-tier consumption tax system, with the sales tax imposed only on either the manufacturer or consumer level, and the service tax on consumers. It is equivalent to the value-added consumption tax (VAT) applied in many other countries.

In Malaysia, the government had employed the SST since 1970s before introducing the GST in 2014. It subsequently switched back to SST again in September 2018.

“Various aspects including strengths and weaknesses of the current SST, and the GST model that was introduced in 2014 must be taken into account to determine the viability of GST or any consumer tax model prior to it being implemented,” said Muhyiddin. He added that the study is required to determine the overall impact of such taxes on the economy and the people’s cost of living, as well as the taxes’ ability to combat the black economy.

(Image: The Malaysian Reserve)

“I understand that there are those who are of the view that GST is a more efficient tax system and the collection is also bigger than SST. However, we have to study it meticulously. The Ministry of Finance had also looked into this matter but has not reached a decision. The government will announce once a decision is made,” stated Muhyiddin.

The prime minister further emphasised that any form of consumer tax that is to be introduced must be simple to implement and not increase business costs.

(Source: Malay Mail)

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