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KUALA LUMPUR: The Federation of Malaysian Manufacturers (FMM) has called on the government to reintroduce the Goods and Services Tax (GST) in the upcoming Budget 2023.

It said the tax would be a timely lifeline for the country’s debt dilemma and shore up adequate fiscal buffers to weather the next economic downturn and it should be at a rate that would not burden the rakyat but still help widen its revenue base.

“As this broad tax base system would increase indirect taxes, it will give flexibility to the government to reduce direct taxes (personal income tax and corporate tax) to make Malaysia a more attractive business destination,” said FMM president Tan Sri Soh Thian Lai in a statement today.

He said that in this regard, GST 2.0’s implementation should not be considered in isolation but as a part of the holistic assessment of Malaysia’s tax system which would require the government to consult all stakeholders for a thorough review process.

Soh said manufacturers had proposed improvements to GST 2.0 to be more consumer-and-business-friendly, among others, reducing the GST rate to four per cent to boost conducive business conditions, gradually bringing down the corporate tax rate to 20 per cent and zero-rate all essential goods and services.