PUTRAJAYA: The implementation of Goods and Services Tax (GST) has strengthened the economy and prevented the ringgit from further weakening, said the Prime Minister.
At the Bank Negara board meeting Monday, Datuk Seri Najib Tun Razak said he was informed that without GST, the country's deficit "would be at 6% or 7%" instead of the existing 3.5%.
"The ringgit would be valued much lower at RM6 or RM7 per US dollar because we will not be given good rating by international agencies as they feel that our revenue is insufficient to meet administrative and development expenditure.
"That was the bad scenario that could have happened.
"Even though there are parties which criticised and protested against its implementation, truth be told that GST has saved the country, allowed development to take place and the wellbeing of the people be looked after," he said.
The ringgit is currently at RM4.45 against the greenback.
Speaking at the Customs Department appreciation dinner later, the Prime Minister also announced plans to corporatise the department to provide personnel with a better service scheme.
"The Government will continue with the plan which was put on hold due to the implementation of GST in 2015," he said, adding this would be done soon.
Hailing Customs Department personnel as the country's economic heroes, the Prime Minister said he wants continuous successful implementation of GST to maintain economic stability.
Najib said with the smooth collection of GST, the people's wellbeing can be looked after and the Government can continue to deliver its promises.
"It is my hope that our economic heroes maintain their successful momentum. As front-liners and professionals that have been involved in the implementation of GST, please communicate the good messages about the tax to people out there," he urged them.
In congratulating the department for the RM41.2bil collection of GST last year, Najib said he wants its officers to find new and effective measures to prevent leakages in the country's revenues.