KUALA LUMPUR: The government has no plans to reintroduce the Goods and Services Tax (GST) and can only consider it once economic recovery is on a firmer footing, said the Finance Ministry (MoF).
The MoF said the proposal to reintroduce GST will only be considered after determining the improvement of the GST mechanism compared to before, so as to reduce the impact on low-income groups
“Currently, people are in the recovery phase after the COVID-19 crisis and are facing the challenge of the rising cost of living.
“Food inflation in 2022 is at a rate of 5.8 per cent and this affects the low-income groups more. At the same time, GST is also a regressive tax,” said the MoF in a written reply published on the Parliament’s website today.
MoF was responding to Datuk Mohd Radzi Md Jidin (PN-Putrajaya) who wanted assurance from the government that GST or taxes which have the same impact as GST will not be reintroduced.
“Any changes in tax-related policy will take into account the impact on the economy and the cost of living of the people.
“Accordingly, the government is constantly monitoring the current economic situation and considering fiscal measures that are appropriate for short and medium-term needs,” the MoF explained.
In addition, according to the MoF in Budget 2023, the government has taken a more progressive approach as a new step to broaden the tax base to those who have the means.
This includes increasing income tax for individuals with taxable income above RM230,000 a year, and proposed taxes on capital gains on the disposal of unlisted shares and on luxury goods.
“The government will continue to engage with all stakeholders to study aspects of reforming the taxation system.
“It does not necessarily involve GST. There is also room to improve the existing Sales and Service Tax (SST),” added the MoF. – BERNAMA