The Malaysian Institute of Economic Research (MIER) chairman also refuted claims that the GST was regressive as it was a consumption based tax that was fair to all segments of society.
“If you consume more, you will have to pay more. There are a number of exemptions that can be introduced to help certain groups, such as small businesses and the bottom 40 (B40) group,” he said when responding to the announcement that the Government was willing to study calls to reintroduce the GST.
Kamal said it would be hard to fill the gap left by the GST even if the SST was broadened to include new sectors.
He noted that there were “teething problems” when the GST was first introduced under the Barisan Nasional government
However, he said that it would be a waste if the Government did not utilise the system.
“The Government sector, including the Finance Ministry was geared up for it, in terms of compliance and rebate system as well.“The system is already there,” he said, adding that it would be a waste of public funds to not utilise it.
“That is why many countries all around the world have adopted the GST. Of course, Pakatan has to take a new position,” he said.
Asked to explain why he recommended 3% for the GST, Kamal said 6% was too high and had pushed the cost of living.
“If you suddenly introduce a rate that is considered is too high, it will affect certain processes and the cost of living. So it is better for it to be introduced at 3%.”