Govt looking at alternatives to wealth tax, may bring back GST, says Deputy Finance Minister II

KUALA LUMPUR: The government is looking at alternatives to a wealth tax, including a Goods and Services Tax (GST), to raise funds for its coffers, says Deputy Finance Minister II Mohd Shahar Abdullah.

"On a wealth tax, the government has no intention at all to implement it at the present moment," he said when answering Wong Shu Qui (PH-Kluang) in the Dewan Rakyat on Thursday (Dec 10).

Shahar said the government is currently studying the feasibility of reintroducing the GST and other consumer-based tax models after taking all aspects into consideration.

"This includes the weaknesses in the current Sales and Service Tax (SST) and the GST that was implemented in 2015.

"The study will also cover the effects on the economy, cost of living and the cost of goods, including the black economy," he added.

He also promised that any new tax model that is implemented would be easy to manage and will not increase the cost of business, while strengthening the nation's fiscal standing, adding that there would be no point increasing government coffers through a tax model that will burden the rakyat.

He also said that at the moment, the government is focusing on improving governance and has set up a multi-agency task force to better manage the nation's finances.

Shahar also noted that although the nation's gross domestic product shrank by 17% in the second quarter of this year, there are positive indicators that the economy would recover and grow by between 5.5% and 6% in 2021.

Wong had asked earlier if a wealth tax or the GST would be reintroduced to increase government revenue.

She said that Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz had recently met with bankers and publicly stated that a committee had been formed to look at ways to increase government revenue and would introduce a new tax model when the economy recovers.

A 6% GST was implemented on April 1,2015 but was abolished by Pakatan Harapan in 2018, which reintroduced the Sales and Service Tax (SST) on Sept 1 of the same year.

Muar MP Syed Saddiq Syed Abdul Rahman had recently proposed that the government introduce a “windfall tax” on companies that have raked in extraordinary profits during the Covid-19 pandemic.