Nazir Razak supports GST reintroduction, if done correctly

KUALA LUMPUR - The re-implementation of the goods and services tax (GST) can bring Malaysia forward if done correctly, says Tan Sri Nazir Razak.

The prominent banker said Pakatan Harapan (PH) government made a mistake by removing GST back in 2018.

"PH should have reduced the GST and they should have given more exemptions to the lower income groups.

"GST is necessary in the long term," he told reporters after the launch of his book titled 'Di Sebalik Nama' at Kuala Lumpur International Book Fair held in World Trade Center here today.

He was commenting on Prime Minister Ismail Sabri Yaakob’s statement where the government might reconsider introducing GST.

Earlier in his speech, Nazir suggested the government to review how Malaysia was taxing the public as the people were now faced with rising prices of goods and they also suffered from the Covid-19 pandemic.

He also suggested the government to introduce a windfall tax to the higher income groups.

A windfall tax one-off tax imposed by a government on targeted groups.

"Many countries realise about this where if you don't increase income and you increase taxation, you cannot spend the money to help the poorest.

"So Malaysia really needs to relook at the tax system including GST and increase the payment of taxes from the wealthy for the (benefits of the) poorer," he said.

GST was first introduced in 2015 under former Prime Minister Datuk Seri Najib Abdul Razak, which imposed a six per cent tax. It was later abolished after the fall of Barisan Nasional in 2018.

It was reported that Pakatan Harapan (PH) was against the proposal to reintroduce GST, with the presidential council saying that such a move would be harmful to the public given the current situation of high inflation, and rising cost of living, as well as effects of the Covid-19 pandemic on household income.

Former director-general of the Royal Malaysian Customs Department Datuk Seri Subromaniam Tholasy had said that GST reintroduction to replace the current sales and services tax (SST) should be implemented in a targeted manner so it would not burden the lower income group.

On the other hand, the Federation of Malaysian Consumers Association welcomed the reintroduction of GST, as the move would contribute to increasing the national income.

It was said that the reintroduction of GST would result in a sharp rise in the prices of goods.