Direct impact of GST removal goes both ways, says Guan Eng

SERI KEMBANGAN: The abolishment of the Goods and Services Tax (GST) has no doubt had an impact on the Government as it is a source of revenue, says Lim Guan Eng (pic).

Commenting on Moody's Investors Service assessment on Malaysia, the Finance Minister said the direct impact goes both ways.

"The impact is basically because you are taking away sources of revenue but at the same time we are replacing it with the Sales and Services Tax (SST).

"But Moody's also mentioned that by removing GST, you will also be encouraging consumption and that will also help to spur the economy," he told reporters after handing out Hari Raya goodies to the less fortunate at the Palace of Golden Horses here Wednesday (June 13) evening.

Meanwhile, Lim also said the Government has to undertake some necessary fiscal measures that might create some difficulties for the people to address the country's RM1 trillion debt.

He said the Pakatan Harapan administration was serious about maintaining fiscal discipline and measures have to be taken to maintain the budget deficit level at 2.8% of the gross domestic product (GDP).

"We would continue to convince the capital market that we are serious about addressing the RM1 trillion debt problem as announced by our Prime Minister.

"I think we have shown how we are going to address our debt level and that is of course, by reviewing many of the infrastructure projects," he said.

Lim dismissed former prime minister Datuk Seri Najib Tun Razak's claim that the debt level is not at RM1.087 trillion, saying that it was at that level because contingent liabilities that have become direct debts were also included.

"We have never denied that the direct Government debt is at RM687bil. When you talk about Government guarantees which have become direct Government debts, that should also be taken into account when you reveal the true extent of Government debts," he said.