MALAYSIA — Malaysia Prime Minister Datuk Seri Anwar Ibrahim said his administration is “not in a hurry” to reinstate Good and Services Tax(GST) as he vowed to protect the low-and middle-income groups in his country.
“I have a huge issue of having to introduce taxation policies or new initiatives when it affects the plight, ” he told Bloomberg News Correspondent Haslinda Amin during his official visit to Singapore on Monday (30 January).
Ms Haslinda was asking the newly minted PM whether he would consider the implementation of GST to refill his government coffer, which his political coalition had opposed previously.
As a two-time Finance Minister, Mr Anwar acknowledged that GST remains the most transparent and efficient taxation system, but he is not currently considering reinstating GST in Malaysia.
“The issue is, when you have abject poverty, when people do not get even a minimum pay, how do you have a transparent taxation system? Now if you have enough funds, liquidity in the system, then you can say alright, you can pass on to the poor. But we don’t have that now.”
Mr Anwar added that any responsible leader should not resort to raising taxes until the basic issues affecting the poor and general people are dealt with.
“Taxing everybody”
He said unless Malaysia’s income level was raised, for example, to about RM 3,000 to 4000 per month, only then could the government begin to think about it.
“Because otherwise, you’re taxing everybody, although you can give some compensation in return to the poor,” he said.
Regarding Malaysia’s national debt, he said Malaysia “have reached the ceiling and we should gradually go down”, otherwise it would be irresponsible to the next generation.
“We will have to gradually reduce deficit, but should not be at the expense of public welfare, I means the poor, education, and health. So we have to navigate this very carefully.”
He is fortunate that Malaysia’s revenue from taxes has increased slightly, along with petroleum products.
Mr Anwar had earlier said Malaysia’s national debt, including liabilities, has reached RM1.5 trillion and “should be addressed urgently”, which was already more than 80 per cent of the country’s GDP.
PAP bulldozed through GST amendment bill in Singapore Parliament last year
In November last year, a debate was held in Singapore Parliament over the amendment bill to increase the Goods & Service Tax (GST) to 8 per cent, up from the previous 7 per cent.
Members of Parliament from the opposition parties, Workers’ Party (WP) and Progress Singapore Party (PSP) voted against the bill.
Pritam Singh, the Leader of the Opposition, had previously warned that GST is a regressive tax that hits lower-income earners harder, which rising inflation, supply chain disruptions, and rising prices will continue to weigh heavily on Singaporeans.
The incumbent People’s Action Party (PAP) won 83 of the 93 seats in the 2020 General Election. PAP ministers have defended the need for the GST hike so as to have sufficient revenue to cater for future expenses.
While WP MPs and PSP NCMPs have suggested alternative sources of revenues and dip more into the earnings from the reserves — which slows down the growth of reserves and not touching the principal sum.
Back In February 2022, Deputy Prime Minister and Finance Minister Lawrence Wong announced that the 7 per cent GST would be raised by two per cent in two stages, starting with one per cent to 8 per cent starting from 1 January this year and another one per cent to 9 per cent from 1 January 2024.
The hike in GST has generated a lot of unhappiness among the Singapore population and dissatisfaction against the Singapore Government and the ruling party.
