KUALA LUMPUR, MALAYSIA — Prime Minister Datuk Seri Anwar Ibrahim reaffirmed that the Malaysia government will not reintroduce the Goods and Services Tax (GST) or any broad-based consumption tax.
Instead, he emphasized the need to implement alternative measures to reduce national expenditures and address the government’s liability which has reached RM1.5 trillion (US$345 billion) or 82 per cent of the country’s Gross Domestic Product (GDP).
“As I have explained before in previous session (in the Dewan Rakyat), the government has decided to impose subsidy reduction on the T20 categories, as well as multinational and large companies, except those dealing with food security even when the previous administration decided to increase the tariff.”
Malaysia announced the “abolishment” of its GST in 2018 after the Pakatan Harapan (PH) coalition emerged victorious in the 14th general election.
The government plans to reduce subsidies for the wealthy, similar to the previous reduction of electricity subsidies for multinational corporations and other large companies, except those involved in food security.
Mr Anwar reiterated his stance on GST to his fellow parliamentarians during today’s (14 February) sitting of the Prime Minister’s Question (PMQ) Time in the Dewan Rakyat.
Anwar was responding to Wong Kah Woh, Member of Parliament for Taiping, on the government’s plan to tackle the country’s increasing debt.
This was the first-ever PMQ session, which is one of the Speaker’s initiatives to reform the Malaysian Parliament.
Mr Anwar added that the government’s debt, which includes the 1Malaysia Development Bhd (1MDB) amounting to RM18.2 billion, stands at RM1079.6 trillion.
He emphasized the need to restore good governance and address weak management and leakages that have contributed to the country’s debt.
He said the Malaysian government plans to reduce the country’s debt by reviewing public expenditure, expanding the revenue base, and avoiding burdening the people, especially in the education, health, and basic needs sectors, as the debt exceeds economic growth.
Mr Anwar will table Malaysia’s Budget 2023 on 24 February.
Anwar: “not in hurry” to reinstate GST to protect the low-and middle-income groups
Mr Anwar had previously told Bloomberg reporter that his administration is “not in a hurry” to reinstate 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 30 January.
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.
