Plan to not reintroduce the GST is a good move by the unity government, say experts
SHAH ALAM - The unity governmen's move to not reintroduce the goods and services tax (GST), is the right step in order to help Malaysians, say experts.
Universiti Utara Malaysia economist Dr K Kuperan Viswanathan said Anwar is wise not to introduce the GST right away.
"In fact, to enact the GST, the unity government must consolidate its power and win a convincing majority in Parliament," he told Sinar Daily.
Kuperan added that at some point, Malaysia will have to reinstate the GST because the national debt cannot be lowered via conventional tax revenue alone.
"The imposition of a 5 per cent GST will enable the government to obtain a higher level of tax revenue, which can be used to support the poorer sections of society.
"Even though the GST is a regressive tax, the revenue collected can be used to undertake redistributive allocation to the poorer section of society in the form of income support for the B40 group," he added.
Echoing Kuperan’s view, Universiti Tun Abdul Razak adjunct professor Dr Zulkiply Omar also agreed with Anwar’s decision to not implement the GST as the timing is not right for Malaysians.
"GST is a consumption tax. At the moment, people are still in recovery mode after the pandemic. Besides, inflation is also still on the rise."
Zulkiply, who is also a Senior Research Fellow at the Social Wellbeing Research Centre (SWRC) of Universiti Malaya, added that the unity government plans to cut expenses is beneficial if it focuses on improving efficiency rather than cutting government spending on critical areas.
"For example, this can be done by improving the procurement process. Not to forget, government expenditures are crucial for improving domestic demand," he said
Meanwhile, PKT Logistics Group Sdn Bhd Chairman Datuk Jalilah Baba said if there is no GST, the government will probably have to re-introduce SST or something similar.
"However, GST is a better system because we can deduct the costs of production or services," she added.
On Feb 14, Prime Minister Datuk Seri Anwar Ibrahim said the government has no plans to reintroduce the GST and other broad-based consumption taxes to address the national debt.
Anwar further added that other measures will be taken to reduce expenses and reduce the government's liabilities and debt, adding that the country's debt is now at RM1.5 trillion, which represents 82 per cent of the Gross Domestic Product (GDP).