Fahmi denies Bloomberg report on talks to revive GST
Published on: Thursday, August 29, 2024
By: FMT Reporters
Yesterday, Bloomberg quoted sources as saying there was an emerging view within the government that reviving the GST would be politically easier than removing RON95 subsidies.
PETALING JAYA: Government spokesman Fahmi Fadzil has denied a Bloomberg report quoting sources as saying the Cabinet has been discussing the viability of reviving the goods and services tax (GST).
No, there have been no such discussions (on bringing back the GST), Buletin TV3 quoted Fahmi as saying today.
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Yesterday, Bloomberg reported that Putrajaya was weighing bringing back the GST consumption tax instead of cutting subsidies for RON95 petrol to boost its coffers.
It also quoted sources familiar with the matter as saying there was an emerging view within the government that imposing the GST would be politically easier than removing the subsidies for RON95, which are currently fixed at RM2.05 per litre.
The sources said no decision had been reached yet given the political sensitivities.
The GST was introduced at 6% in 2015 under then prime minister Najib Razak. It was abolished by the Pakatan Harapan government three years later and replaced with the sales and service tax (SST) at the same rate.
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Through the SST, Putrajaya collected an estimated revenue of RM26.7 billion in 2020, and RM27.9 billion in 2021. In comparison, it collected RM44 billion from the GST in 2017.
Last Tuesday, the Organisation for Economic Cooperation and Development urged the government to bring back the GST at a low rate while implementing targeted transfers to low-income households to offset the consumption tax’s effects.
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The National Chamber of Commerce and Industry of Malaysia had also previously called for the GST to be reintroduced at a rate of 4% to boost government revenue.
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